COMPREHENSIVEANNUAL FINANCIAL

REPORT

CITY OF SHREVEPORT, LOUISIANAFor the Year Ended December 31, 2004

Finance DepartmentElizabeth B. Washington, Director

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and. whereappropriate, at the office of the parish clerk of court.

Release Date.

About the Cover

The cover features Rivervicw, Shreveporl's newest park, which was funded by the Red River WaterwayCommission. Included in the park are a series of interactive fountains that play in time to music andlights, a Rose Plaza complete with 30-fool-tall artist-created rose light sculptures, a waterfall,performance area, giant amphitheater, and boat dock.

Picture provided by Morgan, Hill, Sutton, and Mitchell Architectsii

CITY OF SHREVEPORT, LOUISIANACOMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED DECEMBER 31,2004

TABLE OF CONTENTS

Page

INTRODUCTORY SECTIONLetter of Transmittal 1Certificate of Achievement for Excellence in Financial Reporting 8Organizational Chart 9Principal Officials 10Finance Department 11

FINANCIAL SECTIONIndependent Auditor's Report 13Management's Discussion and Analysis 17Basic Financial Statements:

Government-wide Financial Statements:Statement of Net Assets 31Statement of Activities 32

Fund Financial Statements:Balance Sheet - Governmental Funds 34Reconciliation of the Governmental Funds Balance Sheet to

the Statement of Net Assets 36Statement of Revenues, Expenditures, and Changes in Fund Balance -

Governmental Funds 38Reconciliation of the Statement of Revenues, Expenditures, and Changes

in Fund Balances of Governmental Funds to the Statement of Activities .. 40Statement of Revenues, Expenditures, and Changes in Fund Balance -

Budget and Actual - General Fund 42Statement of Revenues, Expenditures, and Changes in Fund Balance -

Budget and Actual - Community Development 45Statement of Net Assets - Proprietary Funds 48Statement of Revenues, Expenses, and Changes in Fund Net Assets -

Proprietary Funds 50Statement of Cash Flows - Proprietary Funds 51Statement of Fiduciary Net Assets - Fiduciary Funds 53Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 54Statement of Net Assets - Component Units 55Statement of Activities - Component Units 56

Notes to the Financial Statements 60

III

Required Supplementary Information:Trend Data on Pension Funding 109

Combining and Individual Fund Statements and Schedules:Combining Balance Sheet - Nonmajor Governmental Funds 114Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -

Nonmajor Governmental Funds 116Schedules of Revenues, Expenditures, and Changes in Fund Balance

- Budget and Actual:Riverfront Development 118

Combining Statement of Net Assets - Nonmajor Enterprise Funds 120Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -

Nonmajor Enterprise Funds 121Combining Statement of Cash Flows - Nonmajor Enterprise Funds 122Combining Statement of Net Assets - Internal Service Funds 126Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -

Internal Service Funds 127Combining Statement of Cash Flows - Internal Service Funds 128Combining Statement of Net Assets - Fiduciary Funds 132Combining Statement of Changes in Net Assets - Fiduciary Funds 133

Discretely Presented Component Unit:Metropolitan Planning Commission

Balance Sheet 136Statement of Revenues, Expenditures, and Changes in Fund Balance 137

STATISTICAL SECTIONFund information:

General Governmental Expenditures by Function 140General Governmental Revenues by Source 142General Fund Expenditures by Function 143General Fund Revenues by Source 144General Fund Tax Revenues by Source 145Property Tax Levies and Collections 146Assessed and Estimated Actual Value of Taxable Property 147Summary of Ad Valorem Tax Millage Rates 148Property Tax Rates and Tax Levies - Direct and Overlapping Governments . . . . 149Principal Taxpayers 150Special Assessment Billings and Collections 151Computation of Legal Debt Margin 152Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt

Per Capita 153Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total

General Governmental Expenditures 154Computation of Direct and Overlapping Debt -

General Obligation Bonds and Notes 155Revenue Bond Coverage - Water and Sewer Bonds 156Revenue Bond Coverage - Municipal and Regional Airports 157

iv

Demographic Statistics 158Property Value, Construction, and Bank Deposits 159Miscellaneous Statistics 160

VI

C I T Y O F S H R E V E P O R TAIMmerlcaCtof p.o 110x31109 SUREVF.PORT, LA 7 mo • m4TEXASAVE. SIIREVF.PORT.LATHOII I I I I I wcbsilc: www.ci.slirevcptirt.la us

III.1

May 2,2005

Mayor Keith HightowerMembers of the City CouncilCity of Shreveport, Louisiana

Mayor and Members of the City Council:

In accordance with Section 10.02, paragraph (j), of the City Charier, I am pleased to submit theComprehensive Annual Financial Report for the year ended December 31, 2004. The financialstatements were prepared in conformity with generally accepted accounting principles (GAAP) andaudited in accordance with generally accepted government auditing standards by a firm of licensedcertified public accountants. I believe this report presents comprehensive information about theCity's financial and operating activities during 2004 that is useful to taxpayers, citizens, and oilierinterested persons.

This report was prepared by the Accounting Division of the Finance Department and consists ofmanagement's representations concerning the finances of the City. Consequently, managementassumes full responsibility Tor the completeness and reliability of till of the information presentedin this report. To provide a reasonable basis for making these representations, management of IhcCity has established a comprehensive Internal control framework that is designed both to protect thegovernment's assets from loss, theft, or misuse and to compile sufficient reliable information for thepreparation of the City's financial statements in conformity with GAAP. Because the cost of internalcontrols should not outweigh their benefits, the City's comprehensive framework of internal controlslias been designed to provide reasonable rallicr than absolute assurance llial the financial statementswill be free from material misstatement. In addition to internal controls established by managementand those built into the accounting system, the Office of Internal Audit periodically reviews theadequacy of internal controls. The Internal Auditor and her staff are independent of the FinanceDepartment. As management, we assert that, to the best of our knowledge and belief, this financialreport is complete and reliable in all material respects.

In accordance with Section 4.28 of the City Charter, the City Council is required to provide for anannual independent audit of the accounts and financial transactions of the City by a firm of

independent certified public accountants duly licensed to practice in the State of Louisiana. Theaccounting firm of KPMG LLP was selected by the City to conduct its annual audit. The goal of theindependent audit was to provide reasonable assurance that the financial statements of the City forthe fiscal year ended December 31,2004, are free of material misstatement. The independent auditinvolved examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements; assessing the accounting principles used and significant estimates made by management;and evaluating the overall financial statement presentation. The independent auditor concluded,based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that theCity's financial statements for the fiscal year ended December 31, 2004, are fairly presented inconformity with GAAP. The independent auditor's report is presented as the first component of thefinancial section of this report.

The independent audit of the financial statements of the City was part of a broader, federallymandated "Single Audit" designed to meet the special needs of federal grantor agencies. Thestandards governing Single Audit engagements require the independent auditor to report not onlyon the fair presentation of the financial statements, but also on the audited government's internalcontrols and compliance with legal requirements, with special emphasis on internal controls andlegal requirements involving the administration of federal awards. These reports are available in theCity's separately issued Single Audit Report.

GAAP require that management provide a narrative introduction, overview, and analysis toaccompany the basic financial statements in the form of Management's Discussion and Analysis(MD&A). This letter of transmittal is designed to complement MD&A and should be read inconjunction with it. The City's MD&A can be found immediately following the report of theindependent auditors.

Profile of the City of Shrevcport

The City of Shreveport was incorporated in 1839. It is located on the west bank of the Red Riverin Northwest Louisiana, approximately thirty miles south of Arkansas and fifteen miles east ofTexas. Shreveport is the seat of Caddo Parish and the center of a metropolitan area that includesBossier, Caddo, and Webster Parishes. Although located primarily in Caddo Parish, a small portionof the City extends into Bossier Parish. The current area of the City is approximately 121 squaremiles.

The City of Shreveport has been organized under a mayor-council form of government since 1978,when the current City charter was adopted by the voters. The charter provides for a seven membercouncil, with each member selected for four-year terms from separate districts of the City. Themayor is elected at-large for a four-year term, is not a member of the council, but has veto powerover council action.

The City provides a wide range of services including public safety, highways and streets, sanitation,water and sewer services, airports, transportation, recreational activities, general administrationfunctions and others.

These financial statements present the City of Shreveport (the primary government) and itscomponent units. The component units are included in the City's reporting entity because of thesignificance of their operational or financial relationships with the City. Included as discretelypresented component units is the financial data for the City Courts, City Marshal, the DowntownDevelopment Authority, Shreveport Home Mortgage Authority, Metropolitan Planning Commissionand the Shreveport Convention Center Hotel Authority. They are reported separately within theCity's financial statements to emphasize that they are legally separate from the City. Additionalinformation on these legally separate entities can be found in the notes to the financial statements.

Budgetary Control

The annual budget serves as the foundation for the City's financial planning and control. The CityCouncil is required to adopt the final budgets no later than December 15 each year. Budgets areadopted at the fund, department, object level. The exception is the Community DevelopmentDepartment where the budget is at the fund, department, division, object level. Transfers outsideof these require the approval of the City Council.

Local Economy

Unemployment for 2004 was better than 2003. The unemployment rate as of December 31,2004was 5.7% compared to 6.1 % in 2003 and 6.6% in 2002. Over the past five years, the unemploymentrate took a hit from 4.9% in 2000 to 7.1 % in 200J. Since then, the rate has been steadily declining.The unemployment rate is expected to decrease in 2005. There is a projection of a couple ofthousand new jobs over 2005 through 2006. This places the Shreveport area below average amongits Louisiana counterparts. The positive side is there has been a nice expansion at a manufacturingplant, and it is expected to continue from 2004 to 2005. Shreveport has one of the larger durablegoods manufacturing markets in the State. A large call center was opened at the end of 2004. Therewere 1,100 jobs with additional jobs to be added.

Casinos and their hotels added jobs to the region during the past five years. From 2000 through2002, the Shreveport market had growth in its revenues. The casino industry felt the impact of theeconomy in 2003. Shreveport's revenues decreased in 2003 and have decreased again in 2004.Following is a five-year history of the City's gaming revenues at December 31:

2000 $ 7,209,3092001 14,819,5422002 15,052,4112003 13,754,5952004 12,891,549

KPMGLLPSuite 1900333 Texas StreetShreveport. LA 71101-3692

Independent Auditors1 Report on Compliance With Requirements Applicable to thePassenger Facility Charge Program and on Internal Control Over Compliance and

Schedule of Passenger Facility Charges Revenues and Disbursements

The Honorable Mayor and Members of the City CouncilCity of Shreveport, Louisiana:

Compliance

We have audited the compliance of the City of Shreveport, Louisiana (City) with the compliancerequirements described in the Passenger Facility Charge Audit Guide for Public Agencies (the Guide),issued by the Federal Aviation Administration, for its passenger facility charge program for the year endedDecember 31, 2004. Compliance with the requirements of laws, regulations, and contracts applicable to itspassenger facility charge program is the responsibility of the City's management. Our responsibility is toexpress an opinion on the City's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and the Guide. Those standards and theGuide require that we plan and perform the audit to obtain reasonable assurance about whethernoncompliance with the compliance requirements referred to above that could have a direct and materialeffect on the passenger facility charge program occurred. An audit includes examining, on a test basis,evidence about the City's compliance with those requirements and performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides a reasonable basis forour opinion. Our audit does not provide a legal determination on the City's compliance with thoserequirements.

As described in item 04-1 in the accompanying schedule of findings and questioned costs, the City did notcomply with the requirement regarding PFC assurances that are applicable to its passenger facility chargeprogram. Compliance with such requirements is necessary, in our opinion, for the City to comply with therequirements applicable to that program.

In our opinion, except for the noncompliance described in the preceding paragraph, the City complied, inall material respects, with the requirements referred to above that are applicable to its passenger facilitycharge program for the year ended December 31,2004.

Internal Control Over Compliance

The management of the City is responsible for establishing and maintaining effective internal control overcompliance with the requirements of laws, regulations, and contracts applicable to the passenger facilitycharge program. In planning and performing our audit, we considered the City's internal control overcompliance with requirements that could have a direct and material effect on the passenger facility chargeprogram in order to determine our auditing procedures for the purpose of expressing our opinion oncompliance and to test and report on the internal control over compliance in accordance with the Guide.

KPMG LLP. a U S. limned liability partnership, is IHe U.Smember firm of KPMG International, a Swiss cooperative

There have been some shifts in the local market. It has gone through growth and change. However,the casino industry continues to be a vital part of the local economy.

It is projected that there will be a faster growth in Louisiana personal income from 2004 to 2005 ascompared to the 2001 - 2003 period. More money in the pockets of the citizens mean more localsales tax revenue for the City. Retail sales showed the effect of the sluggish economy from 2001through 2003. There was a.25% rate increase beginning in 2003. Sales tax rebounded in 2004. Thefive-year trend has been as follows:

20002001200220032004

$75,548,50375,481,65475,971,48682,343,00787,911,418

The fact that sales tax growth was re-energized in 2004 was probably due in some part to thecontinued development of a wider variety of retail shopping options in the City.

Commercial construction has continued to increase in value and number of permits. In 2004, therewere 100 permits issued valued at $148,694,901 compared to 80 permits valued at $125,055,018 in2003. The low mortgage rates have continued to keep residential construction high. In 2004, thenumber of permits issued decreased to 615, down from 694 in 2003. The value of those permitsincreased to $113,224,966 from $107,285,644 in 2003. The five-year history in construction hasshown ups and downs in the number of permits with mostly increases in value except between 2000and 2001 for commercial construction. During 2000 to 2001, the value of residential constructionwas static. Following is a chart which shows the five-year history for commercial and residentialconstruction:

FiscalYear

20002001200220032004

Commercial ConstructionNumberOf Units Value

1031618780

100

$ 72,305,84557,699,144

100,925,424125,055,018148,694,901

Residential ConstructionNumber

Of Units

355374448694615

Value

$ 56,689,35356,942,28772,277,725

107,285,644113,224,966

It appears that 2004 is the year that all local economic indicators, including personal bankruptcyshow that the local economy is improving and starting to grow again.

Long-term Financial Planning

For many years, gaming revenues were considered a limitless source of revenue to meet variouscommunity needs. While the casino industry is still a vital part of the local economy, it is unlikelythat there will be strong growth in gaming revenues in the near future. In 2004, there was lot ofdiscussion for the 2005 budget review as to how much support the City should provide from gamingrevenues for community and civic organizations.

Debt service for the Convention Center bonds has been being paid from gaming revenues. In 2005,and perhaps for the next few years, the payment will be made from the Debt Service Fund. Therewilt be an increase of approximately $250,000 in the amount of gaming revenues transferred to theGeneral Fund in 2005 to help keep the operating reserve at a 7% level.

Most of the City's capital projects will have little, if any, impact on the City's operating budgets.The opening of Ledbetter Heights Park and Community Center plus Cockrell Park CommunityCenter will increase operating costs, not likely over $100,000 annually for each one. Increase incosts are inevitable as the City transitions from a traffic signal system with more technicalcomplexity. These cost increases are at least several years away.

In 2004, the City was informed that the State Supreme Court reversed the lower court's decision onthe amount that should be contributed to the State Firefighters Retirement System. The amount thatthe City contributed went from 9% of payroll to 18% and has subsequently grown to 25% of payroll.For the eighteen month past due amount, approximately $6 million, the Retained Risk Fundabsorbed the retroactive payments. This will allow the General Fund not to make immediate andsevere cuts in its budget. Going forward, the City's annual payment for the firefighters pension willincrease by $4 million annually. This new mandate will make the preparation of the 2006 budgetsmore difficult.

On a long-term basis, the City must focus on how much support it should provide from gamingrevenues to various community groups and civic groups. While sales taxes appear to be rising,revenues are projected to grow at a slower rate than expenditures. In order to fill the gap betweenrevenues and expenditures, the City will need to make some hard choices in reducing expenditures.

The largest business-type activity is the Water and Sewer Fund. In mid-2004, the fund implementeda 10% rate increase. Another 10% increase will become effective on January 1, 2005. Theseincreases should allow the fund to meet its budget increases primarily due to larger debt servicepayments on funds borrowed from the State loan programs for improvements to the wastewatertreatment plant and lift stations. Also, the rate increases will pay the interest payment on the firstincrement of a new $75 million bond issue for system improvements.

Long-term, the City must determine what are true needs, what are the priorities, what do citizenswant, etc. In the coming budgets, these questions must be answered.

Relevant Financial Policies

As discussed earlier, the City's policy on the use of unpredictable revenues, specifically gamingrevenues is essential to prudent planning. Gaming revenues cannot be considered the seemingly,limitless source of revenue. As the casino industry changes, it is imperative that a policy be in placeon the use of this revenue. In 2004, we have seen the effect of a policy.

Major Initiatives

The City's largest major initiative for 2004 was the $ 100 million project to build a convention centerdowntown. It is more than 50% complete. The Convention Center is scheduled to open by early2006. The project began affecting the operating budget in 2004. In 2005, it will significantly affectthe Riverfront Fund (gaming revenues) to the tune of $1.5 million for pre-opening services. To theextent that the Convention Center runs an operating deficit after opening, it is likely to beappropriated from the Riverfront Fund. This will begin in 2006.

Awards and Acknowledgments

The Government Finance Officers Association of the United States and Canada (GFOA) awardeda Certificate of Achievement for Excellence in Financial Reporting to the City of Shreveport for itsComprehensive Annual Financial Report for the fiscal year ended December 31, 2003. TheCertificate of Achievement is the highest form of recognition in governmental accounting andfinancial reporting, and its attainment represents a significant accomplishment by the City and itsmanagement. We are proud to have received this award each year for the past twenty-five years(beginning with our Comprehensive Annual Financial Report for the fiscal year ended December 31,1979).

In order to be awarded a Certificate of Achievement, a governmental unit must publish an easilyreadable and efficiently organized Comprehensive Annual Financial Report, the contents of whichconform to program standards. Such reports must satisfy both generally accepted accountingprinciples and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year. We believe our current reportcontinues to conform to Certificate of Achievement Program requirements, and we are submittingit to the GFOA to determine its eligibility for another certificate.

The GFOA has given an Award for Outstanding Achievement in Popular Annual FinancialReporting to the City of Shreveport, Louisiana for its Popular Annual Financial Report for the fiscalyear ended December 31, 2003. We have received this award for the past nine years. The Awardfor Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national awardrecognizing conformance with the highest standards for preparation of state and local governmentpopular reports. In order to receive an Award for Outstanding Achievement in Popular AnnualFinancial Reporting, a government unit must publish a Popular Annual Financial Report, whosecontents conform to program standards of creativity, presentation, understandability and reader

appeal. An Award for Outstanding Achievement in Popular Annual Reporting is valid for a periodof one year only. We believe our current report continues to conform to the Popular AnnualFinancial Reporting requirements, and we are submitting it to GFOA.

Sincere appreciation is expressed to the entire staff in the Finance Department and especially to theprofessional accounting staff whose dedicated and efficient services have made the preparation ofthis report possible. Thanks to the Mayor and City Council for your support of excellence infinancial reporting and fiscal integrity.

Sincerely,

Elizabeth B. WashingtonDirector of Finance

Certificate ofAchievementfor Excellence

in FinancialReporting

Presented to

City of Shreveport,Louisiana

For its Comprehensive Annual

Financial Report

for the Fiscal Year Ended

December 31,2003

A Certificate of Achievement for Excellence in FinancialReporting is presented by the Government Finance Officers

Association of the United States and Canada togovernment units and public employee retirementsystems whose comprehensive annual financial

reports (CAFRs) achieve the higheststandards in government accounting

and financial reporting.

President

Executive Director

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CITY OF SHREVEPORT, LOUISIANA

PRINCIPAL OFFICIALS

Keith HightowerMayor

Kenneth R. Antee, Jr.Chief Administrative Officer

Members of City Council

Calvin B. Lester, Jr. District AR. M. Walford District BThomas G. Carmody, Jr. District CMichael Gibson District DJeffery A. Hogan District EJames E. Green District FTheron J. Jackson District G

10

CITY OF SHREVEPORT, LOUISIANA

FINANCE DEPARTMENT

Department Director

Elizabeth B. Washington

Division Managers

John PistoriusDan ThomasAnna BrownTom MattoxTom Cody

Rosalyn AtkinsDorothy ColeToronya GillyardRosie JacobsMarie LafontantCharles MaddenErma MitchellLynn PetreyLarry PhelpsLashonda Samuels

Accounting Staff

AccountingData ProcessingRevenue CollectionPurchasingRisk Management

Louise BroomG-Ray EvansDanny HawksEvelyn JonesLinda LongBruce MessierAbigail MonetteDiane PharrJames RolfsBrenda Stills

11

12

KPMGUPSuite 1900333 Texas StreetShreveport, LA 71101-3692

Independent Auditors1 Report

To the Members of the City Council andHonorable Keith Hightower, Mayor

City of Shreveport, Louisiana:

We have audited the accompanying financial statements of the governmental activities, the business-typeactivities, the aggregate discretely presented component units, each major fund, and the aggregateremaining fund information of the City of Shreveport, Louisiana (the City) as of and for the year endedDecember 31, 2004, which collectively comprise the City's basic financial statements as listed in theaccompanying Table of Contents. We also have audited the financial statements of each of the City'snonmajor governmental, n on major enterprise, internal service, fiduciary, Shreveport Home MortgageAuthority, and Metropolitan Planning Commission funds presented as supplementary information in theaccompanying combining and individual fund financial statements as of and for the year ended December31, 2004 as listed in the Table of Contents. These financial statements are the responsibility of the City'smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.We did not audit the component unit financial statements of the City Courts, City Marshal, and DowntownDevelopment Authority, which represent 34% and 73%, respectively, of the assets and revenues of theaggregate discretely presented component units. Those financial statements were audited by other auditorswhose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amountsincluded for the City Courts, City Marshal, and Downtown Development Authority, is based on the reportsof the other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes consideration of internal control over financial reporting as a basis fordesigning audit procedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, weexpress no such opinion. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit and the reports of other auditors provide a reasonable basis for ouropinions.

In our opinion, based on our audit and the reports of other auditors, the financial statements referred toabove present fairly, in all material respects, the respective financial position of the governmentalactivities, the business-type activities, the aggregate discretely presented component units, each majorfund, and the aggregate remaining fund information of the City as of December 31, 2004, and therespective changes in financial position and cash flows, where applicable, thereof and the respectivebudgetary comparison for the General Fund and Community Development Fund for the year then ended inconformity with accounting principles generally accepted in the United States of America. In addition, inour opinion, the financial statements referred to above present fairly, in all material respects, the respective

13KPMG LlR » U S limited UabtMy partwihtp. a It* U Smember firm of KPMG Internalion«l. * Swiss coopwaiiv*

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14

financial position of each nonmajor governmental, nonmajor enterprise, internal service, fiduciary,Shreveport Home Mortgage Authority, and Metropolitan Planning Commission funds of the City as ofDecember 31, 2004, and the respective changes in financial position and cash flows, where applicable,thereof for the year then ended in conformity with accounting principles generally accepted in the UnitedStates of America.

In accordance with Government Auditing Standards, we have also issued our report dated April 29, 2005on our consideration of the City's internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters.The purpose of that report is to describe the scope of our testing of internal control over financial reportingand compliance and the results of that testing, and not to provide an opinion on the internal control overfinancial reporting or on compliance. That report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be considered in assessing the results of our audit.

The Management's Discussion and Analysis, schedules of employee contributions, schedules of fundingprogress and related notes identified as Required Supplementary Information in the Table of Contents isnot a required part of the basic financial statements, but is supplementary information required byaccounting principles generally accepted in the United States of America. We have applied certain limitedprocedures, which consisted principally of inquiries of management regarding the methods of measurementand presentation of the required supplementary information. However, we did not audit the informationand express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectivelycomprise the City's basic financial statements. The accompanying financial information in the Introductoryand Statistical Sections are presented for purposes of additional analysis and are not a required part of thebasic financial statements. The accompanying financial information in the Introductory and StatisticalSections has not been subjected to the auditing procedures applied by us in the audit of the basic financialstatements and, accordingly, we express no opinion on it.

LCP

April 29, 2005

15

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16

Management's Discussion and Analysis

The Management Discussion and Analysis (MD&A) offers the readers of the City of Shreveport'sfinancial statements this narrative overview and analysis of the financial activities of the City ofShreveport for the fiscal year ended December 31,2004. This information presented here shouldbe considered in conjunction with additional information provided in the letter of transmittal whichis found on pages 1-7 of this report.

Financial Highlights

The assets of the City exceeded its liabilities at December 31, 2004 by $782.2 million (netassets). Governmental activities' unrestricted assets are a deficit of $15.9 million. This isthe result of the Cily financing certain long-term liabilities that would have been paid overfuture years to take advantage of available lower interest rates, a reduction in the net pensionasset, and a reduction in Internal Service Funds' net assets.The City's total net assets increased $21.3 million. Net assets of governmental activitiesincreased $6.3 million and net assets of business-type activities increased $15.0 million.As of December 31, 2004, the City's governmental funds reported combined ending fundbalances of $181.3 million, a decrease of $56.7 million from the prior year. Of this amount,$7.9 million for the General Fund was unreserved, undesignated, and available for spending.

• The unreserved, undesignated fund balances for the General Fund represented 5.1 % of totalGeneral Fund expenditures.The City's total debt increased $10.7 million.

Overview of the Financial Statements

The management discussion and analysis serves as an introduction to the City's basic financialstatements which are the government-wide financial statements, fund financial statements, and notesto the financial statements. Also included in the report is required supplementary information.

Government-wide financial statements. The government-wide financial statements reportinformation about the overall finances of the City similar to a business enterprise. These statementscombine and consolidate short-term, spendable resources with capital assets and long-termobligations.

The statement of net assets presents information on all of the City's assets less liabilities whichresults in net assets. The statement is designed to display the financial position of the City. Overtime, increases or decreases in net assets help determine whether the City's financial position isimproving or deteriorating.

The statement of activities provides information which shows how the City's net assets changed asa result of the year's activities. The statement uses the accrual basis of accounting, which is similarto the accounting used by private-sector businesses. All of the revenues and expenses are reportedregardless of the timing of when cash is received or paid.

17

The Statement of Activities distinguish functions of the City that are financed primarily by taxes,intergovernmental revenues, and charges for services (governmental activities) from functions whereuser fees and charges to customers help to cover all or most of the cost of services (business-typeactivities). The City's governmental activities include general government, public safety, publicworks, culture and recreation, health and welfare, community development, economic development,and economic opportunity. The business-type activities of the City include airports, water and sewersystems, transit, golf, and parking operations.

Not only do the government-wide financial statements include the City itself which is the primarygovernment, but also its component units, Shreveport Home Mortgage Authority, City Courts, CityMarshal, Downtown Development Authority, Metropolitan Planning Commission, and theShreveport Convention Center Hotel Authority. Although these component units are legallyseparate, their operational or financial relationship with the City makes the City financiallyaccountable. The government-wide financial statements can be found on pages 31 -33 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintaincontrol over resources that have been segregated for specific activities or objectives. The City usesfund accounting to ensure and demonstrate fiscal accountability. The City uses governmental,proprietary, and fiduciary fund financial statements to provide more detailed information about theCity's most significant funds rather than the City as a whole.

Governmental funds. Governmental funds are used to report most of the City's basic services. Thefunds focus on the inflows and outflows of current resources and the balances of spendable resourcesavailable at the end of the fiscal year. Governmental fund statements provide a near- or short-termview of the City's operations. A reconciliation isprepared of the governmental funds Balance Sheetto the Statement of Net Assets and the Statement of Revenues, Expenditures, and Changes in FundBalances of governmental funds to the Statement of Activities.

Fifteen governmental funds are used by the City. There are four major funds which have separatelypresented information in the governmental fund Balance Sheet and Statement of Revenues,Expenditures, and Changes in Fund Balances. The major funds are the General Fund, CommunityDevelopment, Debt Service, andl 999A General Obligation Bonds. The eleven nonmajor funds arepresented in the aggregate in the governmental fund financial statements. The individual fundinformation is presented in combining statements.

The City adopts an annual appropriated budget for its general fund and certain special revenue funds.Budgetary comparison statements have been provided to demonstrate compliance with these budgets.

The basic governmental fund financial statements can be found on pages 34-46 of this report.

Proprietary funds. The City maintains two different types of proprietary funds. Enterprise fundsare used to report the same functions presented as business-type activities in the government-widefinancial statements. The City uses enterprise funds to account for its airports, water and sewer, andother operations. Internal service funds are an accounting device used to accumulate and allocatecosts internally among the City's various functions. The City uses internal service funds to account

18

for its health care, retained risk, and fleet services. Because these services predominantly benefitgovernmental rather than business-type functions, they have been included within governmentalactivities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements,only in more detail. Proprietary fund financial statements provide separate information for theairports and water and sewer operations, both of which are considered to be major funds of the City.

Conversely, internal service funds are combined into a single, aggregated presentation in theproprietary fund financial statements. Individual fund data for the internal service funds is providedin the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 48-52 of this report.

Fiduciary funds. Fiduciary funds are used to account for assets held by the City in a trustee capacityor as an agent for others. Activities from fiduciary funds are not included in the government-widefinancial statements because the City cannot use these assets for its operations. The accounting forfiduciary funds is much like that used in proprietary funds. The basic fiduciary aggregated fundfinancial statements can be found on pages 53-54 of this report.

Notes to the financial statements. The notes provide additional information that is essential to afull understanding of the data provided in the government-wide and fund financial statements. Thenotes to the financial statements can be found on pages 60-108 of this report.

Other information. In addition to the basic financial statements and accompanying notes, thisreport also presents certain required supplementary information concerning the City's progress infunding its obligation to provide pension benefits to its employees. Required supplementaryinformation can be found on pages 109-111 of this report.

The combining statements for nonmajor governmental funds, enterprise funds, internal service funds,and fiduciary funds are presented immediately following the required supplementary information onpensions. Combining and individual fund statements and schedules can be found on pages 114-118for governmental funds, pages 120-123 for enterprise funds, and pages 126-129 for internal servicefunds and pages 132-133 for fiduciary funds.

19

Government-wide Financial Analysis

Net assets. The following table reflects condensed information on the City's net assets:

Net Assets(in millions)

Current and other assetsCapital assets

Total assetsLong-term debt outstandingOther liabilities

Total liabilitiesNet assets

Invested in capital assets,net of related debt

RestrictedUnrestricted (Deficit)

Total net assets

GovernmentalActivities

2004$243.2661.2904.4398.3

30.7429.0

2003$301.6

602.9904.5411.1

24.3435.4

Business-typeActivities

2004$ 45.0

452.7497.7166.724.2

190.9

2003$45.1410.2455.3145.7

17.8163.5

Total

429.244.5

( 4.6)

299.71.85.3

2004$ 288.2!. 113.91.402.1565.054.9619.9

2003$ 346.71.013.11.359.8556.842.1598.9

285.71.84.3

$469.1 $306.8 $291.8

744.2 714.948.6 46.3

(10.6) J 3)$ 782.2 $ 760.9

At December 31,2004, the City as a whole had assets greater than its liabilities by $782.2 millioncompared to $760.9 million at December 31,2003 due primarily to an increase in capital assets. Themajority (93.5%) of the City's net assets of governmental activities are invested in capital assets(streets, drainage, construction in progress, buildings, equipment, etc.). The capital assets are netof the outstanding principal of the debt associated with their acquisition. These assets are notavailable for future expenditures since they will not be sold. Restrictions by outside organizationsare imposed upon 9.8% of the net assets. Therefore, these assets are unavailable for generalexpenditures but must be used for the intended purposes. Unrestricted net assets of governmentalactivities are a deficit of $ 15.9 million at the end of the year, an increase from a $4.6 million deficitin 2003. Long-term liabilities which would have been paid over future years have been financed totake advantage of available lower interest rates. The Employees Retirement System had a $5.6million charge from a net pension asset to a pension obligation. The Retained Risk Fund, an internalservice fund had a reduction in net assets of $5 million. The deficit does not mean that the City hasinsufficient resources to pay bills for the next year. However, it does show that on a long-term basis,the City has commitments beyond which it has current resources to fund the obligation. The largestof these commitments, besides the general obligation bonds are certificates of indebtedness whichwere issued to fund state pension obligations and notes issued for remodeling of the IndependenceStadium.

The net assets of the City's business-type activities are $306.8 million, an increase of $15.0 millionfrom 2003. The increase is primarily the result of capital contributions. As with the governmentalactivities, the majority (97.7%) of the net assets are invested in capital assets. The City uses theseassets to provide services to the citizens. The unrestricted net assets of the business-type activitiesare $5.3 million at December 31, 2004 compared to $4.3 million in the prior year.

20

Changes in net assets. The City's total revenues and expenses for governmental and business-typeactivities are reflected in the following chart:

Changes in Net Assets(in millions)

GovernmentalActivities

Revenues:Program revenues:

Charges for servicesOperating grants and

contributionsCapital grants and

contributionsGeneral revenues:

Property taxesSales taxesOther taxesGrants and contributions

not restricted to specificprograms

OtherTotal revenues

Expenses:General governmentPublic safetyPublic worksCulture and recreationHealth and welfareCommunity developmentEconomic developmentEconomic opportunityInterest on long-term debtMunicipal and regional airportsWater and sewerageShreveport area transitGolfDowntown parking

Total expensesIncrease (Decrease) in net assets

transfersTransfersIncrease in net assetsNet assets January 1 , 2004Net assets December 31, 2004

2004

$20.1

17.9

7.2

51.087.912.8

2.920.2

220.0

35.684.341.015.3

.36.05.14.6

17.5---——

209.7before

10.3( 4.0)

6.3469.1

S475.4

2003

$18.3

15.6

13.5

48.982.312.6

1.628.9

221.7

27.977.438.113.5

.45.34.82.9

17.8---

—_

188.1

33.6( 2.9)

30.7438.4

$469.1

Business-typeActivities

2004

$56.4

3.8

14.8

~—

.775.7

——

————_

—10.243.1

9.71.3.4

64.7

11.04.0

15.0291.8

$306.8

2003

$48.9

2.9

15.7

———

1.068.5

__——_———

10.439.88.91.4.4

60.9

7.62.9

10.5281.3

$291.8

Total2004

$76.5

21.7

22.0

51.087.912.8

2.920.9

295.7

35.684.341.015.3

.36.05.14.6

17.510.243.19.71.3.4

274.4

21.3_

21.3760.9

$782.2

2003

$67.2

18.5

29.2

48.982.312.6

1.629.9

290.2

27.977.438.113.5

.45.34.82.9

17.810.439.8

8.91.4

.4249.0

41.2

—41.2

719.7$760.9

21

Revenues for the City's governmental activities for the year ended December 31,2004 were $220.0million compared to $221.7 million in 2003.

- Program revenues decreased $2.2 million in 2004 compared to 2003 primarily as a result of adecrease in capital grants and contributions.• Capital grants and contributions were down $6.3 million due to a decrease in the contribution

of property through donations and annexations.- General revenues are, for the most part, comprised of sales and property taxes (79.5%).

• Property tax revenues represent 29.2% at $51.0 million compared to $48.9 million in 2003.Revenue increased over the prior year due to increased property values and collection ofdelinquent taxes. Property was revalued January 1, 2004.

• Sales taxes represent 50.3% of revenues at $87.9 million compared to $82.3 million for2003. Sales taxes increased approximately 6.8% due to increased retail sales.

• Other revenues decreased $8.7 million primarily due to a $4.5 million contractor settlementfor the Convention Center received in 2003. Investment earnings were lower due to adecrease in available funds for investment as a result of capital project expenditures.

Revenues by Source - Governmental Activities

The cost of providing all governmental activities this year was $209.7 million, an increase of $21.6million from the prior year. The key factors for the increase were:

- General government expenses increased by $7.7 million. This was mainly due to the decreasein the employee retirement system pension net asset and an increase in claims expenses.

- Public safety expenses increased by $6.9 million. Most of the increase relates to an increase inpension contributions.

- Public works expenses increased by $2.9 million. The majority of the expense increase wasdepreciation of $1.5 million and an increase of $.9 million in the operations of the landfill.

The City's five largest programs are public safety, public works, general government, interest onlong-term debt and cultural and recreation. The graph below shows the expenses and programrevenues generated by governmental activities:

22

Expenses and Program Revenues - Governmental Activities

Business-type Activities. Charges for services for the City's business-type activities were $56.4million for 2004, an increase of $7.5 million from 2003.

- Municipal and Regional Airports revenues were up $.5 million. Landing fees increased as wellas rental revenues.

- Water and Sewerage revenues increased $7.3 million in 2004. There were two rate increasesduring 2004 which accounts for the increase in revenues. The rate increases were used to meetthe budget increases primarily due to larger debt service payments on funds borrowed for systemimprovements.

23

Revenues by Source - Business-type Activities

The costs of these business-type activities were $64.7 million for 2004, an increase of $3.8 millionfrom 2003 primarily due to increased operating and interest expenses for the Water and SewerageFund. Operating expenses increased $2.3 million and interest expense increased $1.1 million.

Expenses and Program Revenues - Business-type Activities

24

Financial Analysis of the City's Funds

Governmental funds. The analysis of governmental funds serves the purpose of looking at whatresources came into the funds, how they were spent and what is available for future expenditures.Did the government generate enough revenue to pay for current obligations? What is available forspending at the end of the year? The City's governmental funds for the year ended December 31,2004 reflect combined fund balances of $ 181.3 million, a decrease of $56.7 million compared to theprior year. Forty-eight percent of the fund balances are reserved to pay for debt service ($44.6million) and to pay for contracts and purchase orders which have been committed to in the prioryear(s) $42.5 million. Management has an actual plan for forty-seven percent of the fund balances$85.3 million which are reported as unreserved, designated. This is primarily for capital projects.The remainder of the fund balances are available for spending except amounts reserved forinventories and endowments and assets held for sale.

The General Fund is the City's operating fund which provides most basic services. Its fund balancehad an increase of $2.1 million from the prior year. Revenues were up for the year, increasing by$9.3 million. The major revenue sources are property taxes, sales taxes, and charges for services.

- Sales tax collections increased $5.6 million over 2003. Retail sales were up for the year.- Charges for services increased $1.5 million in 2004. The increase in charges for services was

primarily in landfill and emergency medical fees.- Total expenditures of the General Fund increased $21.7 million from the prior year due primarily

to increased pension expenses for public safety employees, equipment purchases, and increasedclaims expenses. Pension expenses were up $7.1 million, equipment $6.1 million, and claims$3.1 million.

The Debt Service Fund has a total fund balance of $44.6 million which is reserved for payment ofprincipal and interest on debt outstanding. The fund balance for 2004 increased by $2.1 millionduring the year. The assessed value of property increased for 2004 while debt is being paid off.Also, debt payment on the Convention Center is being paid for by casino revenues rather thanthrough the debt service millage.

Proprietary funds. Net assets for the Municipal and Regional Airports increased $10.9 millionprimarily as a result of capital contributions from the FAA for the noise abatement program.Property surrounding the Regional Airport was purchased in connection with the noise abatementprogram. Water and Sewerage's net assets increased by $4.2 million. Revenues were up $7.3million due to two rate increases to primarily meet the budget increases for larger debt servicepayments on funds borrowed for system improvements.

25

General Fund Budgetary Highlights

During the year, the City Council revised the City's budget several times. After the first quarter,amendments and supplemental appropriations were approved to reflect the actual beginning fundbalances estimated during the budget process which must be submitted by October 1 for the nextyear. Additional changes were made as new information indicated a need. The major differencesbetween the original budget and the final budget were overall revenues were revised down $1.3million while expenditures were increased by $3.6 million. The increase in expenditures weremostly for improvements and equipment and materials and supplies. During the year, revenuesexceeded the revised budget by $3.1 million while expenditures exceeded the budget by $4.0 millionmostly for claims.

Overruns in appropriations at the legal level of budgetary controls were experienced by:

- Office of MayorImprovements and equipment exceeded the budget by $805 due to increased computer softwarepurchases.

- Other unclassifiedInterest and civic appropriations exceeded the budget by $ 112,655 due to lower than anticipatedoperating funds. No amounts were budgeted for interest expense.Claims exceeded the budget by $5,193,427 partly due to an increase in claims incurred but notreported.

- PoliceMaterials and supplies exceeded the budget by $537 due to increased fuel expenses.

- FireMaterials and supplies exceeded the budget by $31,410 due to increased fuel and operatingsupplies expenses.

- Public WorksPersonnel costs exceeded the budget by $ 148,653 due to increased overtime expenses for cleanupafter storm damages. Contractual services exceeded the budget $330,134 due to increasedlandfill usage.

- Culture and recreationMaterials and supplies exceeded the budget by $60,350 due to use of inventory materials.Contractual services exceeded the budget by $35,198 due to increased utility costs.

Capital Assets and Debt Administration

Capital assets. The City's investment in capital assets as of December 31, 2004 for itsgovernmental and business-type activities was $1.1 billion net of depreciation as reflected in thefollowing schedule.

26

Capital Assets(net of depreciation in millions)

Governmental Business-typeActivities Activities Total

2004 2003 2004 2003 2004 2003

Land $86.2 $ 84.7 $28.4 $ 25.4 $ 114.6$ 110.1Construction in progress 137.4 92.8 111,6 63.3 249.0 156.1Buildings 119.1 109.5 40.1 41.3 159.2 150.8Improvement other than

buildings 29.8 30.8 19.1 20.0 48.9 50.8Equipment 23.0 21.3 9.2 6.5 32.2 27.8Distribution and collection

systems - - 244,3 253.6 244.3 253.6Infrastructure 265.7 263.8 - - 265.7 263.8

Total $661.2 $602.9 $452.7 $410.1 $1.113.9 $1.013.0

Major additions to capital assets during the current fiscal year included the following (in millions):

Airport PART 150 property acquisition program paid for with Federal AviationAuthority grants and State grants $ 3.0

New City Jail funded with General Obligation Bonds 7.3New Central Fire Station funded with General Obligation Bonds 5.0Concrete Street Panel Replacement Project funded with General Obligation Bonds 3.0Slack Industrial Park Roadway funded with General Obligation Bonds 2.2New Fire Station Number 13 funded with General Obligation Bonds 1.4I-49/Norris Ferry Road Connector funded with General Obligation Bonds and

Caddo Parish funds 1.4Fant Parkway North Extension, Phase II funded with General Obligation Bonds 1.3

$24.6

Current amounts committed call for spending an additional $30.6 million on the convention center.Resources on hand from bond proceeds will be used to fund this project. The water and sewersystem plans to spend an additional $10.3 million on the Amiss Water and the Lucas WastewaterTreatment Plants. The water and sewer system plans to borrow the funds to complete the projects.

Detailed information on the City's capital assets can be found in Note III E on pages 77-81 of thereport.

Long-term debt At year end, the City had $559.0 million in bonds and other lending agreements,including $8.1 million in Section 108 Housing and Urban Development guaranteed loans as shownin the following table.

27

Outstanding DebtGeneral Obligation and Revenue Bonds

and Other Lending Agreements(in millions)

Governmental Business-typeActivities Activities Total

2004 2003 2004 2003 2004 2003

General obligation bonds $285.3 $305.8 $ .2 $ .3 $285.5 $306.1Revenue bonds - - 177.4 152.9 177.4 152.9Other lending agreements 95.9 89.1 .2 .2 96.1 89.3

Total $381.2 $394.9 $177.8 $153.4 $559.0 $5483

New debt was added during the fiscal year. In governmental activities, $24.7 million in refundingbonds were issued. In business activities, new debt of $33.0 million was issued and $10.7 millionin refunding debt was issued. The new debt was issued for improvements to the water and sewersystems.

State statutes limit the amount of government obligation debt a municipality may issue at amaximum of 10% of the assessed valuation for any purpose. The maximum may be exceeded if theaggregate issued for all purposes does not exceed 35% of the total assessed valuation. The City'soutstanding general obligation debt is below the state limit. Approximately $114 million ofadditional general obligation bonded debt is available for issuance.

Detailed information on the City's long-term debt can be found in Note III H on pages 83-98 of thereport.

Economic Factors and Next Year's Budgets and Rates

The economy is an issue which had to be taken into consideration when developing next year'sbudget. The local economy appears to be improving. Retail sales are projected to increase 2.5% in2005. Unemployment is expected to decrease in 2005. Employment in services and in the retailsector are the areas where most jobs are located. Retail trade is one of the largest employmentsectors in Louisiana.

In setting the budgets for 2005, the City dealt with a number of issues with City-wide impact.Among the issues was the need to increase the number of police officers on patrol, providingequipment for departments and water and sewer infrastructure needs. The 2005 budget includedfunding two new recruit classes in the Police Department and one in the Fire Department. Tocontinue improving the quality and condition of the equipment operated by the City departments,a $3.7 million financing package was included in the 2005 budget to be paid for over five years. TheWater and Sewerage Department's budget will include selling $25 million of bonds in 2005, the firstin a series of $75 million, for water and sewer improvements.

28

A rate increase of 10% for water and sewer charges will be reflected in next year's budget. Theincrease takes effect on January 1, 2005. Overall, there are no major new programs contemplatedin the 2005 budget.

Requests for Information

This financial report is designed to provide a general overview of the City's finances for all thosewith an interest in the City's finances. Questions concerning any of the information provided in thisreport or requests for additional financial information should be addressed to the Director of Finance,City of Shreveport, 505 Travis Street, Suite 670, Shreveport, LA 71101.

29

30

CITY OF SHREVEPORT, LOUISIANA

STATEMENT OF NET ASSETS

DECEMBER 31, 2004

ASSETS

Cash and cash equivalents

Investments

Receivable, net

Due from component unit

Due from primary govemmenl

Internal balancesInventories

Prepaid items

Mortgage and noics receivable

Other assets

Restricted asscis:

Cash and cash equivalentsInvestments

Capital assets:

Land and construction in progress

Other capital assets, net of depreciation

Total assets

LIABILITIES

Accounts payable

Accrued liabilities

Accrued interest payable

Due to component unit

Due to other governments

Due to primary government

Deferred revenue

Liabilities payable from restricted assets

Deposits and deferred charges

Non-current liabilities:

Due within one yearDue in more than one year

Total liabilities

NET ASSETS

Invested in capital assets, net of related debt

Restricted for:

Debt service

Community development

Other purposes

Unrestricted (deficit)

Total net assets

The accompanying notes arc an integral part of the financial statements.

Primary Government

Governmental

Activities

106,740,667 $

74,475,461

41,574,182

38,750

-

900,944

1,106,318

751,057

13,243,158

2,839,440

1,521,000

--

223,636,451

437,564,049

904,391,477

10,035,409

384,109

3,503,891

63,244

6,522,652

--9,590,077

--

599,845

37,384.991

360,902,341

428,986,559

444,476,123

43,552,696

1 ,905,823

1,385,173

(15,914,697)

475,404,918 $

Business-type

Activities

3,815,062 $

2,458,679

9,690,441

--

-

(900,944)

1,176,002

165,675

--2,796,585

9,653,224

16,147,011

140,002,123

312,689,072

497,692,930

6,099,893

4,986,577

8,660

34,000

-

--

68,460

12,561,563

463,049

541,258

166,138,287

190,901,747

299,719,309

1,771,797

--

-

5,300,077

3_q6J91,183 $

Total

110,555,729 $

76,934,140

51,264,623

38,750

--

-2,282,320

916,732

13,243,158

5,636,025

11,174,224

16,147,011

363,638,574

750,253,121

1,402,084,407

16,135,302

5,370,686

3,512,551

97,244

6,522,652.,

9,658,537

12,561,563

1 ,062,894

37.926,249

527,040,628

619,888,306

744,195,432

45,324,493

1,905,823

1,385,173

(10,614,820)

782,196,101 $

Component

Units

6,555,025

3,958,770

1,143,103

--

63,244

--

--

99,331

13,795,324

563,24fi

2,948,680

—

1,003,514

1,931,082

32,061,319

190,662

9,943

1 16,567

-

51,470

38,750

-

--

-

2.193.88318,053,894

20,655,169

2,583,753

2,217,596

--1,123,157

5,481,644

11,406,150

31

CITY OF SHREVEPORT, LOUISIANA

STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED DECEMBER 31,2004

Functions/Programs

Primary Government:

Governmental Activities:

General government

Public safety

Public worksCulture and recreation

Health and welfare

Community development

Economic development

Economic opportunity

Interest on long-term debt

Total governmental aclivitics

Business-type activities

Municipal and Regional Airports

Water and Sewerage

Shrcvcport Area Transit System

Golf

Downtown Parking

Total business-type activities

Total primary government

Ex pcnscs

35,556,332

84,274,805

41,031,932

15,353,039

293,575

6,022,108

5,073,823

4,596,238

17,540,449

209,742,301

Charges for

Services

Program Revenues

Operating

Grants and

Contributions

7,579,210

11,570,980

694,610

228,556

20,073,356

10,208,330

43,058,3259,728,821

1,334,610

433,000

64,763,086

274,505,387 S

7,103,457

45,695,302

1 ,968,562

989,289

598,239

56,354,849

76,428,205

Component units:

Shrcveport Home Mortgage Authority $

City Courts

City Marshal

Downtown Development Authority

Metropolitan Planning Commission

Total component units S

6,713,167

606,437

15,032

8,107

5,397,428

537,491

4,616,772

17,894,434

965,097 $ 711,550 $

2,471,114 569,875

1,422,048 256,360

1,508,483 651,477

1,122,614 142,396 155,000

7,489,356 $ 2,331,658 $ 155,000

General Revenues:

Taxes:

Property taxes levied for general purposes

Property taxes levied for debt service

Sales taxes

Franchise taxes

Occupational licenses

Gaming

Grants and contributions not restricted to specific programs

Investment earnings

Payment from City of Shreveport

Miscellaneous

Transfers

Total general revenues and transfers

Change in Net Assets

Net assets - beginning

Net assets-ending

The accompanying notes arc an integral part of the financial statements.

32

Capital

Grants and

Contributions

7,199,579

7,199,579

293,689

1, 0(10,087

2,530,859

3,824,635

21,719,069 $

13,430,190

1,006,950

356,151

14,793,291

21,992,870

Net (Expenses) Revenue and

Changes fn Net Assets

Primary Government

Govern mental

Activities

Business-type

Activities Total

Component

Units

(35,556,332) $

(69,982,428)

(21,654,936)

(14,643,397)

(285,468)

(396,124)

(4,536,332)

20,534

(17,540,449)

(164,574,932)

(164,574,932)

10,619,006

4,644,014

(4,873,249)

(345,321)

165,239

10,209,689

10,209,689

(35,556,332)

(69,982,428)

(21,654,936)

(14,643,397)

(285,468)

(396,124)

(4,536,332)

20,534

07,540,449)

""(164,574,932)

10,619,006

4,644,014

(4,873,249)

(345,321)

165,239

10,209,689

(154,365,243)

(253,547)

(1,901,239)

(1,165,688)

(857,006)

(880,973)

(5,058,453)

20,929,041

30,078,509

87,911,418

6,924,341

5,892,082

12,891,549

2,932,256

3,840,636

3.493,196

(3,982,341)

170,910,687

6,335,755469,069,163

475,404,918

731,051

3,982,341

4.713.392

14,923,081

291,868,102

306,791,183

20,929,041

30,078.509

87,911,418

6,924,341

5,892,082

12,891,549

2,932,256

4,571,687

3,493,196

175,624,079

21,258,836

760.937,265

782.196,101

918,309

182,6794,036,584

179,839

_5,3I7,411

258,958

11,147,192

11,406,150

33

CITY OF SIIREVEPORT, LOUISIANABALANCE SHEET

GOVERNMENTAL FUNDSDECEMBER 31,2004

ASSETS

Cash and cash equivalents

Investments

Properly luxes receivable, net

Franchise taxes receivable

Accounts receivable, net

Due from component unit

Due from other governments

Due from other funds

Inventories, at costNotes receivable, net

Assets held for resale

Restricted assets:

Cash and cash equivalentsTotal assets

LIABILITIES AND FUND BALANCE

Liabilities:

Accounts payable

Accrued liabilities

Due to other governmentsDue to other funds

Due to component unit

Deferred revenue

Deposits and deferred charges

Notes payableTotal liabilities

Fund balance:

Reserved for:Debt service

Encumbrances

Assets held for resale

InventoriesEndowments

Unreserved, designated for:

Subsequent years' expenditures

Landfill closure

Unreserved, undcsignatcd

Unreserved, designated reported in nonmajor:

Special revenue funds

Capital project funds

Unreserved, undesignated reported in nonmajor:

Special revenue funds

Tola! fund balance

Total liabilities and fund balance

General

3,680,157

2,371,620

5,469.458

1,706,069

1,174,455

38,750

10,203,6825,680,099

845,598

1,521,000

32,690,888 S

1,890,366

384,109

6,294,974

6,276,994

63,244

2,005,289

599,845

17,514,821

3,860,789

845,59814,719

2,542,388

7,912,573

Community

Development

15,176,067

32,690,818..

200

545,813

6,572,60732,649

13,243,158

15,523

20,409,950

207,884

227,678

596,895

9,218,556

8,115,000

18,366,013

1,881,611

15,523

146.803

Debt

Service

23,491,181

15,139,276

8,085,611

340.519

47,056,587

2,440,226

2,440,226

44,616,361

2,043,937

20,409,950 $

44,616,361

The accompanying notes arc an integral part of the financial statements.

34

1 999 A

General

Obligation

Bonds

29,265,225

18,860,452

---------266,923

-—

--

48,392,600

Other

Govern mental

Funds

$ 36,159,334

33,239,404

---

1,109,797

--1,507,704

13,124,879

--

75,335

„

$ 85,216,453

Total

Governmental

Funds

$ 92,596,097

69.610,752

13.555,069

1 ,706,069

2,830,065

38,750

18,624,512

19,104,550

845,598

13,243,158

90,858

1,521,000

$ "'"_' _233,766,478

4,847,350 S..

-

--

--

--

--

r4,847,350

27,968,397

~--

--

15,576,853„

--

—--

-

43,545,250

48,392,600 S

2,616,760

--

-

6,650,753

-15,423

----

9,282,936

8,757,622

75,335

--

~

-

-

-

2,867,941

64,312,443

(79,824)

75,933,517

85,216,453

$ 9,562,360

384,109

6,522,652

13,524,642

63,244

13,679,494

599,845

8,115,000

52,451,346

44,616,361

42,468,419

90,858

845,598

14,719

15,576,853

2,542,388

8,059,376

2,867,941

64,312,443

(7V.824)

181,315,132

S 233,766,478

35

CITY OF SHREVEPORT, LOUISIANA

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2004

Fund balances - total governmental funds

Amounts reported for governmental activities in the statement of

net assets arc different because:

Capital assets used in governmental activities arc not financial

resources and therefore are not reported in the governmental

funds.

Governmental capital assets

Less accumulated depreciation

Other assets used in governmental activities that are not financial resources

and therefore are not reported in the governmental funds

Bond issuance costs

Less amortization

Net pension assets represent the excess cumulative contributions to

pension plans and arc nol considered as financial resources for

governmental funds

Policcmcns pension and relief fund

Some of the City's property taxes will be collected after year-end

but are not available soon enough to pay for the current period's

expenditures and therefore are deferred in the governmental funds.

Long-term liabilities including bonds payable are not due and payable

in the current period and therefore are not reported in the governmental

funds. Long-term liabilities at year-end consist of:

Bonds, notes, and loans payable

Unamortized bond discount

Unamortized certificate of indebtedness discount

Deferred charge on refunding

Unamortized bond premium

Accrued interest payable

Net pension obligations

Landfill postclosure care

Compensated absences

Internal service funds arc used by management to charge the costsof certain activities to individual funds. The assets and liabilities of the

internal service funds arc reported with governmental activities.

Net assets of governmental activities.

The accompanying notes are an integral part of Ihe financial statements.

181,315,132

873,696,361

(213,066,480)

2,133,002

(218,777)

(377,700,138)

3,561,921

53,821

2,542,107

(1,543,987)

(3,503,891)

(1,477,670)

(2,542,388)

(1,892,261)

660,629,881

1,914,225

834,357

4,089,417

(382,502,486)

9,124,392

475,404,918

36

37

Cll k O* MIKfe.Vt.l'OKI,STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

GOVERNMENTAL FUNDSFOR THE YEAR ENDED DECEMBER 31,2004

29,464,878

80,464,341

33,005,430

11,020,022

REVENUES

Taxes:

Property

Sales

Franchise

Licenses and permits

Intergovernmental

Charges for services

Fines and forfeitures

Gaming

Investment earnings

Miscellaneous

Total revenues

EXPENDITURESCurrent:

General government

Public safetyPublic works

Culture and recreation

Health and welfare

Community development

Economic development

Economic opportunityDebt service:

PrincipalInterest and other charges

Bond issuance costsAdvance refunding escrow

Capital outlay

Total expenditures

Excess (deficiency) of revenuesover (under) expenditures

OTHER FINANCING SOURCES (USES)

Transfers in

Transfers outRefunding bonds issued

Premium on bonds issued

Certificate of indebtedness issuedDiscount on certificate of indebtedness issuedLoan proceedsCapital leasesPayments to refunded bond escrow agent

Total other financing sources and (uses)

Net change in fund balances

Fund balances-beginning

Fund balances-ending

The accompanying notes are an integral part of the financial statements.

General

20,537,534

87,911,418

6,924,341

7,600,397

7,861,842

19,012,947

2,799,844

59,1781,342,457

154,049,958

CommunityDevelopment

$--~10,015,993

228,556

--

21,346

713,148

10,979,043

DebtService

$ 29,488,294

-

-

--

1,313,742

-~

289,847

«

31,091,883

6,107,126

2,286,627

26,896

293,575

4,814,883

729,206

4,596,238

28,278,794

15,778,900589,202

328,184

153,954,671

95,287

9,984,438

(14,040,616)

12,747,425

(1,768,382)

2,360,946

(602,358)

44,975,080

(13,883,197)

15,403,084

24,665,443588,117

(24,637,089)

2,050,948

2,146,235

13,029,83215,176,067 $

1,758,588(9,794)

2,053,7312,043,937

16,019,5552,136,358.

42,480,003$ ~44;6i6,36t

38

1999A General

ObligationBonds

Other

GovernmentalFunds

Total

GovernmentalFunds

1,858,339

1,858,339

5,980,604

12,891,549

1,465,668

1.437,591

21,775,412

50,025,828

87,911,418

6,924,341

7,600,397

25,172,181

19,241,503

2,799,844

12,891,549

3,694,378

3,493,196

219,754,635

1,320,541

2,229,966

49,726

4,344,617

33,072,046

82,694,307

33,005,430

11,096,644

293,575

4,814,883

5,073,823

4,596,238

41,686.163

41,686,163

(39,827,824)

130,968

30,468,272

38,544,090

(16,768,678)

28,278,794

15,778,900

720,170328,184

72,154,435

291,907,429

(72,152,794)

(39,827,824)83.373.074

43.545.250

12,153,775

(23,241,649)49,557

5,375,000

(53,910)

1,295,025

(4,422,202)

(21,190,880)97.124.397

75,933.517

39,902,243

(37,884,623)24,715,000

588,117

5,375,000

(53,910)1,295,025

6,107,126

(24,637,089)

15,406,889(56/745,905)

238.061.037

181,315.132

39

CITY OF SHREVEPORT, LOUISIANA

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED DECEMBER 31, 2004

Net change in fund balances - total governmental funds

Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures.

However, in the statement of activities, the cost of (hose assets is allocated over their

estimated useful lives and reported as depreciation expense.

Capital outlay 77,098,644

Depreciation expense (21J96J86)

Donations of capital assets increase net assets in the Statement of Activities, bul do notappear in the governmental funds because they are not financial revenues.

Transfer of capital assets to the Golf Enterprise Fund decreases net assets in theStatement of Activities, but does not appear in the governmental funds becausethey are not financial resources.

Revenues reported in the Statement of Activities which are not reported in

governmental funds because they do not provide current financial resources.

This adjustment is to recognize the net change in unavailable revenues.

(Property taxes)

The issuance of long-term debt provides current financial resources to

governmental funds, while the repayment of the principal of long-term

debt consumes the current financial resources of governmental funds.

Neither transaction, however, has any effect on net assets. Also,

governmental funds report the effect of issuance costs, premiums, discounts,

and similar items when debt is first issued, whereas these amounts are

deferred and amortized in the statement of activities. The detail of these

differences in the treatment of long-term debt and related items is as follows:

Bonds issued (24,715,000)

Premium on bonds issued (588,117)

Loan proceeds (1,295,025)

Certificate of indebtedness issued (5,375,000)

Discount on certificate of indebtedness issued 53,910

Capital leases (6,107,126)Issuance costs 720,170

Principal payments 28,278,794Payments to refunded bond escrow agent 24.965,273

(56,745,905)

The changes in other long-term assets and liabilities are reported in the Statement of

Activities but do not affect current financial resources of governmental funds. The

changes are as follows:

Employees' retirement system net asset (4,380,815)

Employees' retirement system net obligation (1,257,315)

Policemen's pension and relief fund net asset (43,591)

Firemen's pension and relief fund net obligation 11,513

55,802,458

2,829,411

(319,862)

981,722

15,937,879

(5,670,208)

(continued)

40

(continued)

Some expenses reported in the statement of activities do not require the use of current

financial resources and, therefore, are not reported as expenditures in governmental funds.

These expenses consist of:

Interest accreted on capital appreciation debt (1,808,442}

Amortization of deferred charge on refunding (140,670)

Amortization of certificate of indebtedness discount (89)

Amortization of bond premiums 111,114

Decrease in accrued interest 78,922

Amortization of issuance costs (101,303)

Increase in compensated absences (26,248)

Increase in landfill postclosure care (429,790) (2,316,506)

Internal service funds are used by management to charge the costs of certain activities

to individual funds. The change in net assets of the internal service funds is reported

with governmental activities. (4 163,234)

Change in net assets of governmental activities. $ 6,335,755

The accompanying notes are an integral part of the financial statements.

41

CITY OF SHREVEPORT, LOUISIANAGENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL ON BUDGETARY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2004

Budgeted Amounts

REVENUES

Taxes $

Licenses and Permits

Intergovernmental

Charges for services

Fines and forfeitures

Investment earnings

MiscellaneousTotal revenues

EXPENDITURES

Genera! government:Office of mayor:

Salaries, wages and employee benefitsMaterials and supplies

Contractual services

Other charges

Improvements and equipment

Total office of mayor

City council:

Salaries, wages and employee benefitsMaterials and supplies

Contractual services

Improvements and equipment

Total city council

Finance:Salaries, wages and employee benefitsMaterials and suppliesContractual services

Improvements and equipmentTotal finance

Other- unclassified:

Salaries, wages and employee benefits

Materials and supplies

Contractual services

Improvements and equipment

Interest and civic appropriations

Payments to component units

Claims

Total other - unclassified

Total general government

Original

110,422,6007,376,5002,680,00018,444,0003,047,600

6,472,500148,443,200

2,094,30239,392

191,5565,70015,000

2,345,950

935,05113,612270,88417,634

1,237,181

3,990,113

286,553

1,234,932

509,839

6,021,437

3,019,208

1,000

311,000

-2,177,000

4,294,875

4,756,90014,559,98324,164,551

Final

$ 111,772,6007,383,5004,487,30018,916,0003,047,600

1,499,500

147,106,500

2,079,302

39,392

191,556

5,70030,000

2,345,950

934,05113,612270,88426,634

1,245,181

3,940,113

286,553

1,284,932

509,839

6,021,437

3,004,208

1,000

326,0001,300,000

1,977,000

4,294,600

4.756,900

15,659,70825,272,276

ActualAmounts

Budgetary

Basis

115,373,293

7,600,397

4,032,982

19,012,9472,799,844

59,1781,342,457

150,221,098

2,034,243

36,471

189,088

2,536

30,805

2,293,143

859,478

11,136

250,449

25,790

1,146,853

3,793,452260,408

1,282,288

509.0395,845,187

2,932,592

310,857

1,300.0002,089,6554,036,584

9.950,327

20,620,015

29,905,198

Variance With

Final Budget

Positive

(Negative)

3,600,693

216,897

(454,318)

96,947

(247,756)

59,178

(157,043)3,114,598

45,059

2,921

2,468

3,164

(805)

52,807

74,573

2,476

20,435844

98,328

146,66126,1452,644

800

176,250

71,616

1,000

15,143

(112,655)258,016

(5.193,427)

(4,960,307)

(4,632,922)fcontinuedl

42

CITY OF SHREVEPORT, LOUISIANA

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL ON BUDGETARY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2004

(continued)

Budgeted Amounts

Public safety:

Police:

Salaries, wages and employee benefits

Materials and suppliesContractual services

Other charges

Improvements and equipment

Total police

Fire:

Salaries, wages and employee benefits

Materials and supplies

Contractual services

Other charges

Improvements and equipmentTotal fire

Total public safety

Public Works:

Salaries, wages and employee benefits

Materials and supplies

Contractual services

Other charges

Improvements and equipment

Total public works

Culture and recreation:Salaries, wages and employee benefits

Materials and suppliesContractual servicesOther chargesImprovements and equipment

Total culture and recreationTotal expenditures

Excess (deficiency) of revenues

over (under) expenditures

OTHER FINANCING SOURCES (USES)

Capital lease

Transfers in

Transfers out

Total other financing sources and uses

Original

35,369,494

940.457

1,770,129

57,000

2,002,860

40,139,940

34,217,849

989,101

1,451,111

6,300570,698

37,235,059

77,374,999

11,573,557

1,740,581

12,866,016

500

8,587,350

34,768,004

7,088,518766,714

2,855,692231,182

368,35911,310,465

147,618,019

825,181

4,045,000

(6,607,400)

(2,562,400)

Final

35,674,494

1,095,457

1,825,129

67,000

2,002,860

40,664,940

34,217,849

1,079,101

1,556,111

6,3002,091,698

38,951,05979,615,999

11,573,557

1,990,581

13,236,016

5007,978,350

34,779,004

7,053,518811,714

3,095,692231,182

368,35911,560,465

151,227,744

(4,121,244)

6,121,000

4,295,000

(7,499,600)

2,916,400

Actual

Amounts

BudgetaryBasis

35,385,436

1,095,994

1,796,980

63,486

2.002,812

40,344,708

34,163,001

1,110,5111,551,100

785

2,074,912

38.900,30979,245,017

11,722,210

1,779,580

13,566,150

7.574.342

34,642,282

6,865,178872,064

3,130,890214,812367,898

11,450,842155,243,339

(5,022,241)

6,107,126

4,304,339

(7,103,778)

3,307,687

Variance WithFinal Budget

Positive

(Negative)

289,058

(537)

28,149

3,514

48

320,232

54,848

(31,410)

5,011

5,515

16,78650,750

370,982

(148,653)

211,001

(330,134)

500

404.008

136,722

188,340(60,350)(35,198)16,370

461

109.623(4,015,595)

(900,997)

(13,874)

9,339

395,822

39U87(continued)

43

CITY OF SHREVEPORT, LOUISIANA

GENERAL FUNDSTATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL ON BUDGETARY BASISFOR THE YEAR ENDED DECEMBER 31, 2004

(continued)

Net change in fund balance

Fund balances -beginning

Fund balances-ending

The accompanying notes are an integral pan of the financial statements.

Budgeted Amounts

Original

(1,737,219)

13,029,832

11,292,613 $

Final

(1,204,844)

13,029,832

11.824.988

Actual

Amounts

Budgetary

Basis

(1,714,554)

13,029,832

$ 11,315,278

Variance With

Final Budget

Positive

(Negative)

(509,710)

—

$ (509,710)

44

CITY OF SHREVEPORT, LOUISIANA

COMMUNITY DEVELOPMENTSTATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL ON BUDGETARY BASISFOR THE YEAR ENDED DECEMBER 31, 2004

REVENUES

Intergovernmental

Charges for services

Miscellaneous

Total revenues

EXPENDITURES

Administration:

Salaries, wages and employee benefits

Materials and suppliesContractual services

Improvements and equipment

Total administration

Community development projects:Grants

Total community development projects

Housing and business development:

Materials and supplies

Contractual services

Other charges

Improvements and equipment

Total housing and business development

Housing and business development administration:Salaries, wages and employee benefitsMaterials and suppliesContractual services

Other chargesImprovements and equipment

Total housing and business development administration

Workforce development:

Salaries, wages and employee benefits

Materials and supplies

Contractual services

Other charges

Improvements and equipment

Total workforce development

Original

12,864,100

175,000

2,363,100

15,402,200

495,100

7,100

122,20011,800

636,200

931,422

931,422

17,000

5,000

10,770,463

345,673

11,138,136

496,06215,500

239,2111,000

5,700

i 757,473

1,248,639

56,800

1,765,479

105,80037,500

3,214,218

Final

$ 20,291,600

175,000

2,609,000

23,075,600

578,700

9,100110,600

11,800

710,200

1,037,423

1,037,423

32,500

5,000

13,253,096

505,673

13,796,269

501,16215,500

227,211

1,000

5,700750,573

2,242,778

94,3005,060,040

99,000

60,500

7,556,618

Actual

AmountsBudgetary

Basis

$ 10,015,993

228,556

734,494

10,979,043

553,470

8,294111,059

2,530

675,353

580,815

580,815

22,893

~4,374,680

522,024

4,919,597

507,20815,465

225,736354

4,817

753,580

1,151,696

40,230

3,599,275

97,633

127,779

5,016,613

Variance With

Final Budget

Positive

(Negative)

S (10,275,607)

53,556

(1,874,506)

(12,096,557)

25,230

806(459)

9,27034,847

456,608

456,608

9,607

5,000

8,878,416

(16,351)

8,876,672

(6,046)

351,475

646

883(3,007)

1,091,08254,070

1,460,7651,367

(67,279)

2,540,005

(continued)

45

(continued)

CITY OF SHREVEPORT, LOUISIANA

COMMUNITY DEVELOPMENT

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL ON BUDGETARY BASISFOR THE YEAR ENDED DECEMBER 31, 2004

Workforce development administration:

Salaries, wages and employee benefits

Materials and supplies

Contractual services

Other charges

Improvements and equipment

Total workforce development administration

Codes enforcement:

Salaries, wages and employee benefitsMaterials and supplies

Contractual servicesOther charges

Improvements and equipmentTotal codes enforcement

Total Expenditures

Deficiency of revenues under expenditures

OTHER FINANCING SOURCES (USES)Transfers in

Transfers out

Total other financing sources and uses

Net change in fund balance

Fund balances - beginning

Fund balances - ending

The accompanying notes are an integral part of the financial statements.

Budgeted AmountsOriginal

208,807

8,000

24,860

1,000

5,000

247,667

789,939

108,147

1,062,407

370,432

126,024

2,456,949

19,382,065

Final

468,20730,000

120,960

3,000

7,000

629,167

774,938

123,147

962,408

470,432

126,024

2,456,949

26,937,199

Actual

Amounts

Budgetary

Basis

258,762

3,940

31,572

-

7,000

301,274

763,425

1 13,495

932,565

446,295

126,0242,381,804

14,629,036

Variance With

Final Budget

Positive

(Negative)

209,445

26,060

89,388

. 3,000

-327,893

11,513

9,652

29,843

24,137

-75,145

12,308,163

(3,979,865) (3,861,599) (3,649,993) 211,606

2,061,900

(350,000)

1,711,900

(2,267,965)

2,053,731

(2t4,_234)

2,155,900

(350,000)

1,805,900

(2,055,699)

2,053,731

$ (1,968)

2,360,946

(602,358)

1,758,588

(1,891,405)

2,053,731

$ 162,326 S

205,046

(252,358)

(47,312)

164,294

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49

CITY OF SHREVEPORT, LOUISIANASTATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS

PROPRIETARY FUNDSFOR THE YEAR ENDED DECEMBER 31, 2004

Business-type ActivitiesEnterprise Funds

OPERATING REVENUESCharges for services SMiscellaneous

Total operating revenues

OPERATING EXPENSESPersonal servicesContractual services and other expensesUtilitiesRepairs and maintenanceMaterials and suppliesClaimsDepreciation

Total operating expenses

Operating income (loss)

NONOPERATING REVENUES(EXPENSES)

Investment earningsInterest expenseIntergovernmentalPassenger facility chargesBond issuance costsNet decrease in fair value of investmentsLoss on disposal of fixed assets

Total nonoperating revenues (expenses)Income (loss) before contributions

and transfersCapital contributionsTransfers inTransfers out

Change in net assetsTotal net assets-beginningTotal net assets-ending $

Municipaland Regional

Airports

7,08], 95221,505

7,103,457

4,046,751944,097718,724291,332310,801

2,628,033

8,939,738

(1,836,281)

115,439(1,236,411)

293,6891,294,816

(29,083)(29,555)

(3,098)405,797

(1,430,484)12,135,374

124,100~

10,828,99067,613,97278.442,962

Waterand

Sewerage

$ 44,568,7491,126,553

45,695,302

9,599,47410,636,5062,488,5701,591,6153,359,992

9,759,303

37,435,460

8,259,842

695,155(5,296,475)1,000,087-

(261,689)(59,446)(64,701)

(3,987,069)

4,272,7731,006,950-

(1,050,000)4,229,723

207,897,969$ 212,127,692

OtherEnterprise

Funds

S 3,508,74047,350

3,556,090

6,219,1312,399,089

171,00036,712

1,602,147

1,066,957

11,495,036

(7,938,946)

9,458--

2,530,859---(1,395)

2,538,922

(5,400,024)676,013

4,588,379~

(135,632)16,356,161

$ 16,220,529

Total

S 55,159,4411,195,408

56,354,849

19,865,35613,979,6923,378,2941,919,6595,272,940

13,454,293

57,870,234

(1,515,385)

820,052(6,532,886)3,824,6351,294,816(290,772)

(89,001)(69,194)

(1,042,350)

(2,557,735)13,818,3374,712,479

(1,050,000)14,923,081

291,868,102$ 306,791,183

GovernmentalActivitiesInternalServiceFunds

33,730,541677,986

34,408,527

1,596.0953,783,273

43,409854,935945,957

25,770,12666,418

33,060,213

1,348.314

170,935(2.384)

168,551

1,516,865

(5.680,099)(4,163,234)13,287.6269,124,392

The accompanying notes are an integral part of the financial statements.

50

CITY OF SHREVEPORT, LOUISIANASTATEMENT OF CASH FLOWS

PROPRIETARY FUNDSFOR THE YEAR ENDED DECEMBER 31, 2004

Business-type Activities

Cash flows from operating activities:Receipts from operationsPayments to suppliersPayments to employeesClaimsOther receiptsOther payments

Net cash provided by (used in) operatingactivities

Cash flows from noncapital financing activities:IntergovernmentalSubsidy from federal grantTransfers inTransfers outInterest paid on operationsCash bond

Net cash provided by (used in) noncapitalfinancing activities

Cash flows from capital and related financingactivities:Proceeds from issuance of debtAcquisition and construction of capital assetsPrincipal paid on debtInterest paid on debtCapitalized lease paymentCapital grantsTransfers inContributed capital returned to othersBond issuance costsPassenger facility charges

Net cash provided by (used in) capital andrelated financing activities

Cash flows from investing activities:Purchase of investmentsProceeds from sale and maturity of investmentsInterest on investments

Net cash provided by investing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Municipaland Regional

Airports

J 6,634,569(2,048,199)(4,047,040)

21,505(219,999)

340,836

293,689277,629

571,318

(12,516,151)(530,000)

(1,236,411)

11,357,279

1,196,269

(1,729,014)

(3,543,635)5,643,777

116,565

2,216,707

1,399,847

2,792,541

$ 4,192,388

Enterprise Funds

Water Otherand Enterprise

Sewerage Funds

S 43,416,268(16,339,162)

(9,635,427)

1,126,553(2,723,000)

15,845,232

1,000,087

(1,050,000)

473

(49,440)

33,037,108(37.589,700)(8,831,900)(5,605^80)

(48,519)

(152,018)

(19,190,409)

(11,100,000)16,073,058

693,899

5,666,957

2,272,340

6,043,532

S 8,315,872

S 3,560,217(4,290,601)(6,167,183)

31,109(85,000)

(6,951,458)

2,563,3354,488,379

7,051,714

(129,952)

418,446100,000

(101,300)

287,194

(134,554)130,821

9,482

5,749

393,199

566,827

S 960,026

GovernmentalActivitiesInternalService

Total Funds

$ 53,611,054 S(22,677,962)(19,849,650)

1,179,167(3,027,999)

9,234,610

1,000,0872,857,0244.766,008

(1,050,000)

473

7,573,592

33,037,108(50,235,803)(9,361,900)(6,841,791)

(48,519)11,775,725

100.000(101,300)(152,018)

1,196,269

(20.632,229)

(14,778,189)21,847,656

819,946

7,889,413

4,065,386

9,402.900

S 13,468,286 S

37,253,758(6,461,758)(1,601,780)

(26,657,839)

2,532,381

(5,680,099)(2,384)

(5,682,483)

(16,333)

(16,333)

4.512,403163,937

4,676,340

1,509,905

12,634,665

14,144,570

(continued)

Reconciliation of operating Income (loss)to net cash provided by (used in) operatingactivities:

Operating income (loss)

Adjustments to reconcile operating income(loss) to net cash provided by (used in)operating activities:

Depreciation and amortization

(Incrcase)Decrease in assets:ReceivablesDue from other fundsInventoriesPrepaid items

lncrease(Decrease) in liabilities:Accounts payableAccrued liabilitiesDue to other fundsDeferred revenueCustomers' depositsCompensated absences

Total adjustments

Net cash provided by (used in) operating activities

Business-type ActivitiesEnterprise Funds

Municipaland Regional

Airports

Waterand

Sewerage

OtherEnterprise

Funds Total

(continued)

GovernmentalActivitiesInternalServiceFunds

$ (1,836,281) S 8.259.842 S (7,938,946) $ (1.515,385) $ U34M14.

2,628.033 9.759,303 1,066,957 13,454,293 66,418

(420.485)-

(1.521)--

(18,703)119,73117,6662,320

(149,635)(289)

2,177,117

(1.221,829)-

288,401--

(394,866)2,446

(878,943)--63,141

(32,263)

7,585,390

35,78417,128

(68,041)(43,416)

(61,142)35,942--

(15.803)«20,079

987,488

(1,606.530)17,128

218,839(43,416)

(474,711)158,119

(861,277)(13,483)(86.494)(12,473)

10,749,995

(274,760)(2,560.108)

(69,437)(502,250)

(59,797)(887,713)

5,477,399--

(5,685)

1,184,067

340.836 S 15.845.232 S _ (6,951,458) S 9434.610 $ 2.532.381

Non-cash investing, capital and financing activities:

The Municipal and Regional Airports had a net decrease in fair value of investments of $29,555.

The Municipal and Regional Airports disposed of capital assets. The undepreciated cost of the equipment was recorded as a loss of $3,098.

The Department of Water and Sewerage disposed of capital assets. The undepreciated cost of the equipment was recorded as a loss of $64,701.

The Department of Water and Sewerage had a net decrease in fair value of investments of J59.446.

The accompanying notes are an integral pan of the financial statements.

52

CITY OF SHREVEPORT, LOUISIANA

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

DECEMBER 31, 2004

ASSETS

Cash and cash equivalents

Receivables:

Interest receivable

Accounts receivable

Due from other funds

Prepaid items

Investments, at fair value:

U.S. government securities

Mutual funds

Domestic corporate bondsDomestic common slock

Total investments

Other assets:

Cash surrender value of life

insurance policies

Total assets

LIABILITIES

Accounts payable

Due to other funds

Employees' deposits held in escrow

Total liabilities

NET ASSETS

Held in trust for pension benefits

EmployeeRetirement

Funds

11,284,547

602,760

23,777

356,317

604,802

19,105,462

5,463,887

55,311,371

103.072.938

182,953,658

8,158,272203,984,133

67,764

3,072,089

1.716.494

_4,856,347

199.127.786

The accompanying notes are an integral part of the financial statements.

53

CITY OF SHREVEPORT, LOUISIANA

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDSFOR THE YEAR ENDED DECEMBER 31, 2004

EmployeeRetirement

Funds

ADDITIONS

Contributions:

Employer

Plan members

Total contributions

Investment earnings:Net appreciation in fair

value of investments

Interest

Dividends

Total investment earnings

Less investment expense

Net investment income

Miscellaneous

Total additions

DEDUCTIONS

Pensions

Refund of member contributionAdministrative expenses

Life insurance

Total deductions

Change in net assets

Net assets - beginning

Net assets - ending

$ 6,078,031

2,000.458

8,078,489

10,405,572

3,402,082

2,106,915

15,914,569

14,833,366

436.106

23,347,961

13,235,390

876,705215,279

374,430

14.701.804

8,646,157

190.481,629

199.127.786

The accompanying notes are an integral part of the financial statements.

54

CITY OF SHREVEPORT, LOUISIANASTATEMENT OF NET ASSETS

COMPONENT UNITSDECEMBER 31, 2004

ShrevenortHome Mortgage

Authority

ASSETSCash and cash equivalents $ 1,960,749Investments 3,958,770Receivables, net 64,231Due from other governments -Due from primary governmentPrepaid items —Mortgage and notes receivable 13,795,324Other assets 511,926Restricted assets:

Cash and cash equivalentsCapital assets:

Land -Other capital assets, net of depreciation =

Total assets 20.291,000

LIABILITIESAccounts payableAccrued liabilities -Accrued interest payable 116,567Due to other governmentsDue to primary government -Noncurrcnl liabilities:

Due within one year 1,950,541Due in more than one year 14,946,394

Total liabilities "~ 1 013302

NET ASSETSInvested in capital assets, net of related debt —Restricted for:

Debt service 2,217,596Other purposes

Unrestricted __ U)59,902^Tolal net assets $ jJ277j498_

CityCourts

$ 2,957,751

27,645

76,924

CityM.rshil

$ 1418,891

390.0723,452,392

9,734

9,734

390,072

1,107,4831,945,103

$ 3,442.658

247,8661,766,757

166,485

166,485

247,866

1,352.406S 1.600,272

DowntownDevelopment

Authority

64,741

978.477

97,24422,407

51,320

2.948,680

299,0001.061,3085,523,177

13,0209,943

243.342_3.107.5_pp_3,373.805

1.009,465

15,674_|,124,233_

$ 2.149J72

MetropolitanPlanning

Commission

$ 52,893

38,750

704,514231.836

1,027,993

1,423

51,47038,750

91,643

936,350

$ 936,350

Tot.l

6,555.0253.958.7701,070,353

38,75097.24499,331

13,795324563,246

2,948.680

1.003,5141,931,082

32,061,319

190,6629.943

116,56751,47038,750

2.193,88318.053.89420,655,169

2,583,753

2,217.5961,123,1575.481,644

11.406,150

The accompanying notes are an integral part of the financial statements.

55

CITY OF SHREVEPORT, LOUISIANASTATEMENT OF ACTIVITIES

COMPONENT UNITSFOR THE YEAR ENDED DECEMBER 31, 2004

Program Revenues

ExpensesCharges for

Services

Operating

Grants and

Contributions

Shreveport Home Mortgage Authority

Mortgage operationsCity Courts

Judicial

City Marshal

Judicial

Downtown Development Authority

Downtown development

Streetscape program

Parking program

Interest on long-term debt

Total Downtown Development Authority

Metropolitan Planning Commission

Planning and zoning

965,097 $

2,471,114

711,500 $

569,875

1,422,048 256,360

842,882

247,891408,5099,201

1,508,483

30,300

210,777410,400

-.

651,477

---------

1,122,614 142,396 155,000

S 7,489,356 155,000

General Revenues:Property taxes levied for general purposes

Investment earningsPayment from City of Shreveport

MiscellaneousTotal general revenues

Change in Net Assets

Net assets - beginning

Net assets - ending

The accompanying notes arc an integral part of the financial statements.

56

Shreveport Home

Mortgage Authority

City

Courts

Net(Expenses) Revenues and

__ Changes in Net Assets

Downtown

City Development

Marshal Authority

Metropolitan

Planning

Commission Total

(253,547) $

(1,901,239)

(1,165,688)

(812,582)

(37,114)

1,891

(9,201)

(253,547)

(1,901,239)

(1,165,688)

(812,582)

(37,114)

1,891

(9,201)

(253,547) (1,901,239) (1,165,688) (857,006)

(880,973)

(880,973)

(880,973)

(5,058,453)

-1 16,529

-

143,549

260,078

6,531

3,270,967

3,277,498 5

--40,810

2,240,366

--

2.281,176

379,937

3,062,721

3,442,658 $

-18,708

971.000

—989,708

(175,980)

1,776,252

1,600,272 $

918,309

6,632

— 36,290

961,231

104,225

2,045,147

2.149,372

--

825,218

—825,218

(55,755)

992,105

S 936,350 $

918,309

182,679

4,036,584

179,839

5,317,411

258,958

11.147,192

1 1.406J 50

57

58

59

CITY OF SHREVEPORT, LOUISIANANOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2004

I. Summary of Significant Accounting Policies

The accounting policies of the City of Shreveport conform to generally accepted accounting principlesas applicable to governments. The following is a summary of the more significant accountingpolicies:

A. The Financial Reporting Entity

The City of Shreveport (the "City") was incorporated in 1839, under the provisions ofLouisiana R.S. 33:1. In May of 1978, the present City Charter was adopted whichestablished a mayor-council form of government. The City provides a full range ofmunicipal services as authorized by the charter. These include police and fireprotection, emergency medical services, public works (streets and waste collection),public improvements, water and sewer services, parks and recreation, planning andzoning, public transportation, social, cultural and general administrative services.

The basic criterion for determining whether another governmental organization shouldbe included in a primary governmental unit's reporting entity for basic financialstatements is financial accountability. Financial accountability includes theappointment of a voting majority of the organization's governing body and the abilityof the primary government to impose its will on the organization, or if there is afinancial benefit/burden relationship. In addition, an organization which is fiscallydependent on the primary government should be included in its reporting entity.

The financial statements present the City of Shreveport (the primary government) andits component units. The operations of the Shreveport Municipal and Regional Airportsand the Shreveport Area Transit System are included as a part of the primarygovernment. The discrete component units discussed below are included in the City'sreporting entity because of the significance of their operational or financial relationshipswith the City. There are no blended component units in the City.

Discretely Presented Component Units

The component units columns in the government-wide financial statements include thefinancial data of the City's component units. They are reported in a separate column toemphasize that they are legally separate from the City.

City Courts

The City Courts have jurisdiction over all violations of City ordinances and statemisdemeanor cases. The Courts were created by special legislative act. Theirjurisdiction includes the incorporated area of the City of Shreveport plus the fourth wardof Caddo Parish. City judges are elected and cannot be removed by City officials. TheCity Courts are fiscally dependent on the City of Shreveport. The City has the abilityto modify or approve their budget which comes from the General Fund. There arecertain funds collected by the City Courts, pursuant to state statute, which are under the

60

control of the courts. The City Courts serve the citizenry of the City of Shreveport plusWard FourofCaddo Parish.

City Marshal

The City Marshal is the executive officer of the City Courts. The Marshal has thepower of a sheriff in the execution of the courts' orders and mandates in making requestsand preserving the peace. The City Marshal is an elected official. The City Marshal isfiscally dependent on the City of Shreveport. The City has the ability to modify orapprove the budget which comes from the General Fund. Certain funds are collectedsuch as court costs, pursuant to state statute, which are under the control of the CityMarshal. The City Marshal serves the citizenry of the City of Shreveport plus WardFour of Caddo Parish.

Downtown Development Authority

The Downtown Development Authority was established by an ordinance of the City ofShreveport to provide for the revitalization of downtown Shreveport. Its purpose is tocoordinate the efforts of the public and private sectors for the economic and overalldevelopment of the Downtown Development District. The Downtown DevelopmentDistrict is a special taxing district within the City of Shreveport created by an act of theState legislature. The City Council appoints the seven voting members of the Authority.The Authority must submit to the City Council its proposals, programs andrecommendations for the levy of special ad valorem taxes. The City has the ability tomodify or approve the budget of the Authority and its plan of work. The Authority'sgoverning body is not substantively the same as the City's. The Authority providesservices for a limited area of the City of Shreveport, which consists basically of thedowntown area.

Metropolitan Planning Commission

The Metropolitan Planning Commission is responsible for the orderly, physicaldevelopment of the City of Shreveport and the surrounding planning area. TheCommission makes recommendations to the City Council and the Parish Commission.The Metropolitan Planning Commission consists of nine members with four appointedby both the City of Shreveport and the Caddo Parish Commission and one memberelected by joint action of the governing authorities. Although the Commission is legallyseparate, the City acts as its fiscal agent and has the authority to modify and approve itsbudget. The Metropolitan Planning Commission is fiscally dependent on the City.The Metropolitan Planning Commission serves the citizenry of the City of Shreveport.

Shreveport Home Mortgage Authority

The Shreveport Home Mortgage Authority is a public trust, created by state statute, withthe City of Shreveport as beneficiary. The Authority is authorized to undertake variousprograms to assist in the financing of housing for persons of low to moderate incomein the City of Shreveport. There are five trustees that are appointed by the City Councilfor terms of five years. Per the terms of the trust indenture, the City has no power totransact business for the trustees nor to control or direct the actions of the trustees. TheCity is entitled solely to the benefits of the trust, and at the termination of the trust itshall receive the residual assets of the trust. The City cannot access the organization's

61

funds at will, although there is some ability to access them at the discretion of theAuthority. The City is financially accountable since it appoints all of the governingbody and there is a potential for Shreveport Home Mortgage Authority to providespecific financial benefits totheCity. The Shreveport Home Mortgage Authority servesthe citizenry of the City of Shreveport.

Shreveport Convention Center Hotel Authority

The Shreveport Convention Center Hotel Authority is a public trust, created by statestatute, with the City of Shreveport as beneficiary. The Authority is authorized tooversee the development and operation of the Shreveport Convention Center Hotel forthe purpose of furthering economic development. There are five appointed trustees.The trustees are the Mayor, Chief Administrative Officer, City Council President, CityCouncil Vice-President, and a citizen chosen at the discretion of the Mayor andapproved by the City Council. The term of the Trustees shall be for as long as they holdthe office enumerated, and the term of the citizen shall run concurrently with themayoral term. Per the terms of the trust indenture, the City has no power to transactbusiness for the trustees nor to control or direct the actions of the trustees. The Citycannot access the Authority's resources but is the beneficiary of the residual assets ofthe termination of the trust. The City may provide financial support in the form ofinterim financing or guarantor of the Authority's debt. The boards are not substantivelythe same as the City. The Authority serves the citizenry of the City of Shreveport. Thetrust was created in 2002 but has had no report able transaction through the year endedDecember 31,2004.

The Metropolitan Planning Commission does not issue separate financial statements.The government-wide financial statements are presented within the basic financialstatements. The fund financial statements are included as supplementary informationwithin the section entitled Discretely Presented Component Unit. Complete financialstatements of the other individual component units may be obtained from theirrespective administrative offices.

Administrative Offices:

City Courts Shreveport Home Mortgage Authority1244 Texas Avenue 1400 Youree DriveShreveport, Louisiana 71101 Shreveport, Louisiana 71101

City Marshal Downtown Development Authority1244 Texas Avenue 400 Edwards StreetShreveport, Louisiana 71101 Shreveport, Louisiana 71101

Related Organization

Shreveport Housing Authority

The Authority was created by State statute and it is legally separate from the City. TheMayor appoints the five commissioners; however, the City cannot impose its will on theAuthority since it does not have the ability to modify or approve the budget or overruleor modify the decisions of the commissioners. The Authority is fiscally independentand no financial benefit or burden relationship exists with the City. Therefore, it is notincluded in the City's financial statements.

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Jointly Governed Organization

Caddo-Shreveport Sales and Use Tax Commission

The Commission is an independent agency which collects sales taxes. It is legallyseparate from the City. The Commission is a jointly governed organization. The Citydoes not retain an ongoing financial interest or responsibility in its operations. It is notincluded in the City's financial statements.

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement ofactivities) report information on all of the non fiduciary activities of the primary government andits component units. For the most part, the effect of interfund activity has been removed fromthese statements. Governmental activities, which normally are supported by taxes,intergovernmental revenues, and other nonexchange transactions, are reported separately frombusiness-type activities, which rely to a significant extent on fees and charges for support.Likewise, the primary government is reported separately from certain legally separatecomponent units for which the primary government is financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a givenfunction of governmental activities and different business-type activities are offset by programrevenues. Direct expenses are those that are clearly identifiable with a specific function orprogram. Program revenues include 1) fees, fines, and charges to customers or applicants whopurchase, use, or directly benefit from goods, services, or privileges provided by a givenfunction or program and 2) grants and contributions that are restricted to meeting the operationalor capital requirements of a particular function or program. Taxes and other items not properlyincluded among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, andfiduciary funds, even though the latter are excluded from the government-wide financialstatements. Major individual governmental funds and major individual enterprise funds arereported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resourcesmeasurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciaryfund financial statements. Revenues are recorded when earned and expenses are recorded whena liability is incurred, regardless of the timing of related cash flows. Property taxes arerecognized as revenues in the year for which they are levied. Grants and similar items arerecognized as revenue as soon as all eligibility requirements imposed by the provider have beenmet.

Governmental fund financial statements are reported using the current financial resourcesmeasurement focus and the modified accrual basis of accounting. Revenues are recognized assoon as they are both measurable and available. Revenues are considered to be available whenthey are collectible within the current period or soon enough thereafter to pay liabilities of thecurrent period. For property taxes, the City considers revenues to be available if they arecollected within 60 days of the end of the current fiscal period. For revenues other than propertytaxes, the City considers them to be available if they are collected within 90 days of the end of

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the current fiscal period. Expenditures generally are recorded when a liability is incurred, asunder accrual accounting. However, debt service expenditures, as well as expenditures relatedto compensated absences are recorded only when payment is due.

Property taxes, sales taxes, franchise taxes, and interest associated with the current fiscal periodare all considered to be susceptible to accrual and so have been recognized as revenues of thecurrent fiscal period. All other revenue items except landfill fees are considered to bemeasurable and available only when cash is received by the government.

The City reports the following major governmental funds:

The General Fund is the City's primary operating fund. It accounts for all financial resourcesof the general government, except those required to be accounted for in another fund.

The Community Development Fund is responsible for programs to increase housingopportunities, assist in the creation of employment, develop business expansion and regulatecodes enforcement.

The Debt Service Fund accounts for the resources accumulated and payments made for principaland interest on long-term general obligation debt of governmental funds.

The 1999A General Obligation Bond Fund accounts for proceeds of bonds issued forconstruction of a new convention center and multicultural museum.

The City reports the following major proprietary funds:

The Water and Sewerage Fund accounts for the activities involved in operating the seweragetreatment plant, sewerage pumping stations and collection systems, and the water distributionsystem.

The Municipal and Regional Airports Fund accounts for the activities involved in operating thecity's two airports.

Additionally, the City reports the following fund types:

Internal Service Funds account for health care, risk management, and fleet management servicesprovided to other departments on a cost reimbursement basis.

The Fiduciary Funds account for the activities of the Firemen's Pension and Relief Fund, thePolicemen's Pension and Relief Fund and the Employee's Retirement System, which accumulateresources for pension benefit payments to qualified employees.

Private-sector standards of accounting and financial reporting issued prior to December 1,1989,generally are followed in both the government-wide and proprietary fund financial statementsto the extent that those standards do not conflict with or contradict guidance of theGovernmental Accounting Standards Board. Governments also have the option of followingsubsequent private-sector guidance for their business-type activities and enterprise funds, subjectto this same limitation. The City has elected not to follow subsequent private-sector guidance.As a general rule the effect of interfund activity has been eliminated from the government-widefinancial statements. Exceptions to this genera] rule are payments-in-lieu of taxes and othercharges between the government's water and sewerage function and various other functions ofthe government. Elimination of these charges would distort the direct costs and program

64

revenues reported for the various functions concerned. The City does not use an indirect costallocation system. However, the General Fund charges certain funds an administrative overheadcharge based on a cost allocation plan. This is eliminated like a reimbursement and reduces therevenue and expense in the General Fund.

Proprietary funds distinguish operating revenues and expenses from nonoperating items.Operating revenues and expenses generally result from providing services and producing anddelivering goods in connection with a proprietary fund's principal ongoing operations. Theprincipal operating revenues of the enterprise funds and the internal service funds are chargesto customers for sales and services. Operating expenses for enterprise funds and internal servicefunds include the cost of sales and services, administrative expenses, and depreciation on capitalassets. All revenues and expenses not meeting this definition are reported as nonoperatingrevenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City's policy touse restricted resources first, then unrestricted resources as they are needed.

D. Assets, Liabilities, and Net Assets or Equity

1. Deposits and Investments

The City maintains a pooled cash and investment account that is available for use by allfunds, except those restricted by state statutes or other legal requirements. Each fund'spositive equity in the pooled cash and investment account is presented as cash and cashequivalents and investments on the balance sheets. Negative equity balances have beenreclassifled and are reflected as due to/from other funds. Interest income and expense areallocated to the various funds based upon their average daily equity balances.

Investments are reported at fair value based on quoted market prices. Fair value is theamount at which a financial instrument could be exchanged in a current transactionbetween willing parties, other than in a forced or liquidation sale. Interest is accrued asearned. For purposes of the Statement of Cash Flows, the City considers all highly liquidinvestments (including restricted assets) with a maturity of three months or less whenpurchased to be cash equivalents.

The Statement of Investment Policy approved by the Mayor and Chief AdministrativeOfficer authorizes the City to invest in the following types of securities:

Direct obligationsofthell.S. government, includingsuch instruments as treasurybills, treasury notes and treasury bonds.

Money market mutual funds registered with the Securities and ExchangeCommission.

Fully-collateralized certificates of deposit issued by qualified commercial banksand savings and loan associations located within the State of Louisiana(classified as deposits for this footnote).

Repurchase agreements in government securities made with the primary dealersthat report and are regulated by the Federal Reserve Bank of New York.

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Louisiana Asset Management Pool which is authorized under Louisiana RevisedStatute 33:1321.

The City is prohibited from investing in derivatives.

In addition to the above types of securities, the pension trust funds are authorized by theCity's Statement of Investment Policies to invest in the following types of securities:

Corporate bonds - no lower than Baa rated.

Investment contracts and pooled accounts maintained by trust companies, banksand investment managers.

Stocks traded on a national stock exchange.

Short-term money market securities.

Investment policies require that securities underlying repurchase agreements must have aminimum excess of market value of securities over the principal amount of the investment.Securities must have a maturity of less than 3 years.

2. Receivables and Payables

All outstanding balances between funds are reported as "due to/from other funds." Anyresidual balances outstanding between the governmental activities and business-typeactivities are reported in the government-wide financial statements as "internal balances."

Within the City's Water and Sewerage Fund, an estimated amount has been recorded forservices rendered but not yet billed as of the close of the year. The receivable was computedby taking the cycle billings the City sent to its customers in January and prorating the amountof days applicable to the current year. AM trade and property tax receivables are shown netof an allowance for uncotlectibles.

3. Inventories and Prepaid Items

Inventories are valued at cost using the first in, first out (FIFO) method. Inventory in theGeneral Fund consists of materials and supplies held for consumption. Reported inventoriesin the General Fund are equally offset by a reservation of fund balance with indicates thatalthough inventories are a component of assets, they do not constitute "available spendableresources". Inventories in the Enterprise and Internal Service Funds consist of pipes, meters,fittings and valves, repair materials, spare parts and items held for sale at the Municipal GolfCourses. Inventories are accounted for using the consumption method.

Certain payments to vendors reflect costs applicable to future accounting periods and arerecorded as prepaid items in both government-wide and fund financial statements.

4. Restricted Assets

Certain proceeds of the enterprise fund revenue bonds, as well as certain resources set asidefor their repayment, are classified as restricted assets on the balance sheet because their useis limited by applicable bond covenants. The bond construction funds are used to reportthose proceeds of revenue bond issuances that are restricted for use in construction. Thebond and interest sinking funds are used to segregate resources accumulated for debt service

66

payments over the next twelve months. The debt service reserve funds are used to reportresources set aside to make up potential future deficiencies in the revenue bond current debtservice account.

5. Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,bridges, sidewalks, and similar items), are reported in the applicable governmental orbusiness-type activities columns in the government-wide financial statements. Capital assetsare defined by the government as assets with an initial, individual cost of more than $2,500and an estimated useful life in excess of two years. Such assets are recorded at historical costor estimated historical cost if purchased or constructed. Donated capital assets are recordedat estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset ormaterially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.Interest incurred during the construction phase of capital assets of business-type activitiesis included as part of the capitalized value of the assets constructed.

The total interest expense incurred by Water and Sewerage was $6,479,948. Of this amount$1,183,473 was included as the cost of capital assets in construction in progress.

Property, plant, and equipment of the primary government is depreciated using the straightline method over the following estimated useful lives:

Assets Years

Buildings 10-50Improvements other than buildings 10-50Infrastructure 20-75Distribution and collection systems 10-50Equipment 3-20

6. Compensated Absences

It is the City's policy to permit employees to accumulate earned but unused vacation and sickpay benefits. There is no liability for unpaid accumulated sick leave since the City does nothave a policy to pay any amounts when employees separate from service with the City, Allvacation pay is accrued when incurred in the government-wide and proprietary fund financialstatements. A liability for these amounts is reported in governmental funds only if they havematured, for example, as a result of employee resignations and retirements.

Vacation earned is based on the number of years of services as follows:

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Days EarnedTotal Employment Per Year

Less than five years 10Five to ten years 12Ten to fifteen years 15Fifteen to twenty years 18Twenty or more years 21

For classified employees, a maximum of 240 hours of accrued vacation leave can be vestedand carried forward to succeeding calendar years. For non-classified employees, themaximum is 320 hours. All accrued sick leave credited to an employee can be carriedforward to succeeding calendar years without limitation. Accumulated sick leave is forfeitedat the time an employee terminates employment. However, accumulated sick leave is countedas creditable service at retirement if the employee has accumulated at least 175 hours.

7. Long-term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financialstatements, long-term debt and other long-term obligations are reported as liabilities in theappl icable governmental activities, business-type activities, or proprietary fund type statementof net assets. Bond premiums, discounts, issuance costs, and gains (losses) on refunding aredeferred and amortized over the life of the bonds using the effective interest method. Bondspayable are reported net of the applicable bond premium or discount or deferred amount onrefunding. Bond issuance costs are reported as deferred charges and amortized over the termof the related debt.

In the fund financial statements, governmental fund types recognize bond premiums anddiscounts, as well as bond issuance costs, during the current period. The face amount of debtissued is reported as other financing sources. Premiums received on debt issuances arereported as other financing sources while discounts on debt issuances are reported as otherfinancing uses. Issuance costs, whether or not withheld from the actual debt proceedsreceived, are reported as debt service expenditures.

8. Fund Equity

In the fund financial statements, governmental funds report reservations of fund balance foraccounts that are not available for appropriation or are legally restricted by outside partiesfor use for a specific purpose. Designations of fund balance represent tentative managementplans that are subject to change.

The following list describes the reservations and designations encountered in thegovernmental fund financial statements:

Reserved for EncumbrancesEncumbrances outstanding at year-end represent the estimated amount the City intends tohonor as a commitment regardless of the lapse in the appropriation.

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Reserved for InventoriesThis amount represents the portion of fund balance that is not available spendable resourceseven though the inventories are a component of net current assets.

Reserved for Debt ServiceCertain assets have been reserved in the Debt Service Fund for future payment of debtservice.

Reserved for EndowmentsThis is an account to segregate monies donated for a City zoo. The City functions in a trusteecapacity; however, due to the immaterial amount involved, it is carried in the General Fund.

Designated for Subsequent Yearns ExpendituresThe unreserved portion of fund balance designated for subsequent years' expenditures is theamount that has been set aside for future year's budgets.

Designated for Landfill ClosureThe unreserved portion of fund balance designated for landfill closure is to provide foramounts to be required when the landfill closes.

II. Stewardship, Compliance, and Accountability

A. Budgetary Information

Prior to October 1, the Mayor files with the Clerk of Council a proposed operating budget for thefiscal year commencing the following January. The operating budget includes proposedexpenditures and related financing sources. The City Council conducts public hearings andproposes adoption of the various budget ordinances. Prior to December 15, the City Counciladopts the final budgets controlling the financial operations of the City for the ensuing fiscal year.

Legal budgetary control for operating budgets is exercised at the department/object class with theexception of the Community Development Department where control is exercised at thedivision/object class. The ordinances provide lump sum appropriation at the object level. TheCity Charter allows the Mayor to authorize the transfer of budgeted amounts from one activity toanother within the same lump sum appropriation, within the same department with the exceptionof the Community Development Department where funds must be spent within the same division.Budgetary transfers across department lines or between classes of lump sum appropriations mustbe approved by the City Council. During the year, the City Council approves several amendmentsto the budget. The City Charter provides that expenditures may not legally exceed appropriations.Formal budgetary integration and encumbrance accounting are employed as management controldevices during the year forthe General, certain Special Revenue Funds (Community Developmentand Riverfront Development), Capital Projects and Proprietary Funds. Formal budgetaryintegration is not employed for Debt Service Funds because effective budgetary control isalternatively achieved through general obligation bond indenture provisions. The capital projectfunds adopt project length budgets. The budgets for governmental funds are adopted on a basissubstantially consistent with generally accepted accounting principles with the followingexceptions: (1) encumbrances (e.g. purchase orders, contracts) are treated as budgetedexpenditures in the year of the commitment to purchase and (2) capital leases are not budgetedas expenditures at the inception of the leases.

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All appropriations which are not expended or encumbered lapse at year end. Encumbrancesoutstanding at year end are reported as reservations of fund balances and are carried forward.

Revisions were made to the following governmental funds original budgets as follows:

Original Budget Finalincluding Revised

Carry Forwards Revisions Budeet

General Fund $154,225,419 $4,501,925 $158,727,344Community Development 19,732,065 7,555,134 27,287,199

Adjustments necessary to reconcile the excess (deficiency) of revenues and other financingsources over (under) expenditures and other financing uses:

CommunityGeneral Development

Net change in fund balance(Budget Basis) $( 1,714,554) $(1,891,405)

Adjustments:Encumbrances 3.860.789 1.881.611

Net change in fund balance(GAAP Basis) $ 2.146.235 $f 9.794)

B. Excess of Expenditures over Appropriations

During 2004, based on the legally adopted level of control for budgetary purposes, the followingfunds had excess expenditures over appropriations:

General FundOffice of Mayor

Improvements and equipment $ 805

Other unclassifiedInterest and civic appropriations 112,655Claims 5,193,427

PoliceMaterials and supplies 537

FireMaterials and supplies 31,410

Public worksSalaries, wages and employee benefits 148,653Contractual services 330,134

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Culture and recreationMaterials and supplies 60,350Contractual services 35,198

Community DevelopmentAdministration

Contractual services 459

Housing and business developmentImprovements and equipment 16,351

Housing and business development administrationSalaries, wages and employee benefits 6,046

Workforce developmentImprovements and equipment 67,279

C. Deficit Fund Balance

Within the nonmajor capital project funds, under the heading of Miscellaneous GeneralObligation Bond Funds, there was one fund with a deficit fund balance. The 1983 GeneralObligation Bond Fund had a deficit of $881,690. Budgeted revenues have not been fully fundedto offset budgeted expenditures to date.

HI. Detailed Notes on All Funds

A. Deposits and Investments

All deposits of the City are held by one financial institution. At year-end, the carrying amountof the City's deposits was $34,294,503 and the bank balances were $35,428,471. Of the cashbalance, $35,428,471 was categorized as being insured by federal depository insurance orcol lateral ized with securities held by the City's agent in the City's name.

Money market funds in the amount of $18,759,671 were invested by the City's trustee and washeld by the trustees agent in the trustees' name.

Banks holding deposits and/or investments of the City are required to pledge securities to fullycollateralize these transactions. The pledged securities are held by another bank or through bookentry in a custodial account In the federal reserve system. The City must authorize in writing therelease or substitution of the pledged securities.

The City's investments are categorized below to give an indication of the level of risk assumedby the City at year-end. Category 1 includes investments that are insured, registered, or for whichthe securities are held by the City or its agent in the City's name. Category 2 includes uninsuredand unregistered investments for which the securities are held by the counterparty's trustdepartment or agent in the City's name. Category 3 includes uninsured and unregisteredinvestments for which the securities are held by the counterparty, or by its trust department oragent but not in the City's name.

Category Reported Amount/1 2 3 Fair Value

Repurchase agreements $ 54,576,945 $ - $ - $ 54,576,945U.S. Government securities 96,252,266 - 29,595,162 125,847,428Common stock - - 103,072,938 103,072,938Corporate bonds - - 55.311.371 55.311.371

$150.829.211 $ - $187.979.471 338,808,682Mutual funds 5,463,887Louisiana Asset Management Pool (LAMP) 11,722,566Money market funds 18.759.671Total investments 374,754,806Total deposits 34.294.503

Cash, cash equivalents andinvestments includingrestricted assets $409.049.309

The investments in category 3 are owned by the following funds:

Pension Trust $ 177,489,771 94.4%2001 General Obligation Bond Capital Project 8,717,903 4.6Municipal and Regional Airports 1.771.797 _1.0

$187.979.471 100.0%

The Pension Trust fund investments are held by the City's Fiscal agent bank as trustee and in brokerageaccounts which are managed by fixed income and equity managers. The Municipal and Regional Airports'investments are the result of bond indentures which outline the requirements of accounts which hold fundsfor the benefit of bondholders. The Capital Projects' investments are held by a bank as trustee.

Investments in mutual funds and LAMP are not categorized above because they are not evidenced bysecurities that exist in physical or book entry form. LAMP, a local government investment pool, isadministered by LAMP, Inc., a non-profit corporation organized under the laws of the State of Louisiana.While LAMP is not required to be a registered investment company under the Investment Company Act of1940, its investment policies are similar to those established by Rule 2a-7, which governs registered moneymarket funds. The LAMP portfolio includes only securities and other obligations in which localgovernments in Louisiana are authorized to invest. The dollar weighted average portfolio maturity of LAMPassets is restricted to not more than 90 days, and consists of no securities with a maturity in excess of 397days. The fair value of investments is determined on a weekly basis to monitor any variances betweenamortized cost and fair value. For purposes of determining participants* shares, investments are valued atamortized cost. LAMP is designed to be highly liquid to give participants immediate access to their accountbalances.

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Discretely Presented Component Units - Deposits

CityCourts

Shreveport DowntownCity Home Mortgage Development

Deposits - Carrying AmountDeposits - Bank BalancesInsured or coilateralized with securities

held by the entity or by its agentsin the entity's name

Coilateralized with securitiesheld by pledging financialinstitution's trust department in the

City Marshal's nameUncollateralized

Total Deposits-Bank Balances

577,534

Marshal

$1.518.891

256,106

1,723,116

Authority

SI.960.749

Authority

$3.013.421

200,000

2.386.505 1.960.749$1.960.749$2.964.039 $1.979.222

Discretely Presented Component Units - Investments

Shreveport Home Mortgage Authority had the following Category 2 investments:

2.870.047$3.070.047

1984 Issue (Single Family) - Bank One, MBank Investment Agreements1995 Issue (Single Family - Refunding) - Bayerische Landesbank

Investment Agreements2003 Issue (Single Family) - XL Asset Funding Company

Investment Agreements

B. Property Taxes

Reported Amount/Fair Value

$ 66,831

301,786

3.590.153S3.958.770

The City levies taxes on real and business personal property located within its boundaries.Property taxes are levied by the City on property values assessed by the Bossier Parish and CaddoParish Tax Assessors and approved by the State of Louisiana Tax Commission.

Property Tax Calendar

Assessment dateLevy dateTax bills mailedTotal taxes are duePenalties and interest are addedLien dateTax sale - 2004 delinquent property

January 1,2004Not later than June 1,2004On or about November 15, 2004December 31,2004January 1,2005January 1,2005July 1,2005

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Property taxes levied for the current year are recognized as revenues, even though a portion iscollectible in the period subsequent to the levy. The City's property tax collection records showthat 92.1% of the properly taxes due were collected within 60 days after the due date. Assessedvalues are established by the Bossier Parish and Caddo Parish Tax Assessors each year on auniform basis at the following ratios to fair market value.

10% Land 15% Machinery10% Residential Improvements 15% Commercial Improvements15% Industrial Improvements 25% Public Service properties,

excluding land

A revaluation of all property is required to be completed no less than every 4 years. A revaluationwas completed for the tax roll of January 1,2004.

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Governmental funds report deferred revenue in connection with receivables for revenues that arenot considered to be available to liquidate liabilities of the current period. Governmental fundsalso defer revenue recognition in connection with resources that have been received, but not yetearned. At the end of the current fiscal year, the various components of deferred revenue andunearned revenue reported in the governmental funds were as follows:

Delinquent property taxes receivable(General Fund) $ 1,649,191

Delinquent property taxes receivable(Debt Service Fund) 2,440,226

Other deferrals including program notesreceivable 9.590.077

Total deferred revenue forgovernmental funds $13.679.494

D. Federal and State Financial Assistance

Federal and State governmental units represent an important source of supplementary funding tofinance housing, employment and construction programs, and other activities beneficial to thecommunity. These funds, primarily in the form of grants, are recorded in the General, SpecialRevenue, Capital Projects and Enterprise Funds. A grant receivable is recorded when the City hasa right to reimbursement under the related grant. The grants normally specify the purpose forwhich the funds may be used and are audited annually under the Single Audit as mandated byOMB Circular A-133.

The following amounts under various grants and entitlements are recorded as revenues, subsidiesor contributions in the accompanying financial statements:

Fund.

General Fund $ 6,243,328Special Revenue Funds:

Community Development 10,015,993Police Grams 1,072,945Environmental Grants 537,491

Capital Projects Fund 4,370,168Enterprise Funds:

Municipal and Regional Airports 12,429,063Shreveport Area Transit System 2,887,010Water and Sewerage 1.000.087

Totals S38.556.085

Supplementary salary payments are made by the State to certain groups of employees. The Cityis not legally responsible for these salaries. Therefore, the basis for recognizing the revenue andexpenditure payments is the actual contribution from the State, The State paid supplementalsalaries to the following groups of employees: Fire Department $1,896,000, Police Department$ 1,767,010, and City Marshal (a component unit) $ 165,851.

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E. Capital Assets

Capital asset activity for the year ended December 31,2004 was as follows:

Primary Government

BeginningBalance

$84,735,10092.837.504

177.572.604

Increases

$ 1,475,42472.154.434

Decreases

Governmental activities:Capital assets, not being

depreciated:LandConstruction in progressTotal capital assets, not being

depreciatedCapital assets, being depreciated:Buildingsimprovements other than buildingsEquipmentInfrastructureTotal capital assets being depreciated

Less accumulated depreciation for:BuildingsImprovements other than buildingsEquipmentInfrastructureTotal accumulated depreciation

Total capital assets, being depreciated,net 425.365.974 12.198.075 (

( 27.566.01

EndingBalance

$ 86,210,524137.425.927

73.629.858 ( 27.566.011) 223.636.451

142,007,31745,741,86356,346,874

377.859.337621,955,391

12,567,7101,078,0147,587,619

12.327.33633,560,679

( 3,844,676)f 34.887)( 3,879,563)

154,575,02746,819,87760,089,817

390.151.786651,636,507

( 32,562,742)( 14,950,841)( 35,027,703)f 114.048.130( 196.589.417)

( 2,951,520)( 2,068,767)( 5,882,970)( 10.459.347)( 2 1.362.604)

3,844,67634.887

3,879,563

( 35,514,262)( 17,019,608)( 37,065,997)f 124.472.591)(214,072.458)

J 437.564.049

Governmental activities capital assets,net $602.938.578 $85.827.933 $( 27.566.011) $661.200.500

Internal service funds predominately serve the governmental funds. Accordingly, their capitalassets are included as part of the above totals for governmental activities.

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BeginningBalance Increases Decreases

EndingBalance

Business-type activities:Municipal and Regional Airports:Capital assets, not being depreciated:Land $ 22,416,469Construction in progress 2,283,128Total capital assets, not being

depreciated 24.69?,597Capital assets, being depreciated:Buildings 56,442,528Improvements other than buildings 53,917,089Equipment 6,664.963

Total capital assets beingdepreciated 1 1 7,024,580

Less accumulated depreciation for:Buildings ( 21,532,330)Improvements other than buildings ( 34,255,152)Equipment ( 6.023.946)Total accumulated depreciation ( 6 1 .8 1 1 .428)Total capital assets, being depreciated,

net 55.213.152Municipal and Regional Airports

capital assets, net 79.912.749

$ 3,002,97613.708.967

16.711.943

87,821128,40757.304

273,532

( 1,128,924)(1,367,559)( 131.550)( 2.628.033)

(2.354.501)

14.357.442

$f 3.194.5501

f 3.194.550)

( 23,928)( 201.4501

( 225,378)

20,832201.448222.280

( 3.098)

(3. 197,648)

$ 25,419,44512.797.545

38.216.990

56,530,34954,021,5686.520.817

117,072,734

( 22,661,254)( 35,601,879)( 5.954.048)( 64.217.181)

52.855.553

91.072.543

Water and Sewerage:Capital assets, not being depreciated:Land 1,032,277Construction in progressTotal capital assets, not being

depreciated

Capital assets, being depreciated:EquipmentDistribution and collection

systemsTotal capital assets being

depreciatedLess accumulated depreciated for:EquipmentDistribution and collection

systemsTotal accumulated depreciationTotal capital assets, being depreciated,

netWater and sewerage capital assets,

net

1,032,27760.805.717

61.837.994

7,861,195

377.352.145

385,213,340

( 4,285,370)

n27.364.S35)(131.649.905)ted,253.563.435

315.401.429

40.026.700

40.026.700

452,832

3.451.987

3,904,814

( 572,231)

( 9.187.072)( 9.759.303)

f 5.854.484)

34.172.216

(2.019.969)

(2.0 19.9691

( 281,235)

(281,235)

216,534

216.534

< 64,701)

(2.084.670)

9S.8 12.448

99.844.725

8,032,792

380.804.132

388,836,924

( 4,641,067)

(136.551.6071O41. 192.674)

247.644.250

347.488.975

78

BeginningBalance Increases Decreases

EndingBalance

Other business-type activity programs:Capital assets, not being depreciated:LandConstruction in progressTotal capital assets, not being

depreciatedCapital assets, being depreciated:BuildingsImprovements other than buildingsEquipmentTotal capital assets being

depreciatedLess accumulated depreciated for:BuildingsImprovements other than buildingsEquipmentTotal accumulated depreciationTotal capital assets, being depreciated,

netOther enterprise funds capital assets,

netBusiness-type activities capital assets,

net

1,940,408246.058

2,186,466

8,552,049548,668

14.484.911

23,585,628

( 2,129,428)( 172,637)( 8.629.303)( 10,931,368)

12,654.260

14.840.726

$410.154.904

2,429.059

2,429,059

21,791319,862261.709

603,362

( 201,586)( 24,498)( 840.873)( 1,066,957)

i 463.595}

1.965.464

S50.495.122

(2.675.117)

(2,675,117)

( 13,990)

0,092.627)

(1,106,617)

12,5951.092.6261,105,221

( 1.396}

(2.676.513)

Sf7.958.831)

1,940,408

1,940,408

8,559,850868,530

13.653.993

23,082,373

( 2,331,014)( 184,540)( 8.377.550)( 10,893,104)

12.189.269

14.129.677

S452.691.195

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities:General government $ 457,544Public safety 2,897,732Public works, including depreciation of general

infrastructure assets 13,548,180Community development 252,106Culture and recreation 4,140,624Capital assets held by the City's internal

service funds are charged to the variousfunctions based on their usage of the assets 66.418

Total depreciation expense-governmental activities S21.362.604

Business-type activities:Municipal and Regional Airports $ 2,628,033Water and Sewerage 9,759,303Shreveport Area Transit System 1,001,670Golf 65.287

Total depreciation expense-business-type activities

79

Construction commitments

The government has active major construction projects as of December 31, 2004. The projectsinclude the Convention Center Complex, various public works projects, Airport additions, andimprovements to Water and Sewerage facilities. At year end, the government's commitments withcontractors are as follows:

RemainingProject Commitment

Wastewater Treatment Plant Expansion $ 7,980,854

Stoner Lift Station 2,356,522

AMISS Water Treatment Plant,Plants I& II Filter Improvements 1,273,534

Far Part 150 Property Acquisitions 688,149Improvements for Continental Airline

Facility 537,077Construct West Parallel Taxiway 4/22 795,625Cockrell Park Community Center 1,858,505Union Street Paving 829,656Riverfront Convention Complex 30,593,299

SPAR Plane Arium Renovations 708,750East 84* Street Paving 557,860

Financing Sources

Water and Sewerage RevenueBondsWater and Sewerage RevenueBonds

Water and Sewer Revenue BondsFAA Grants and LADOT Grants

Airport Authority RevenuesFAA Grants and LADOT GrantsGeneral Obligation BondsGeneral Obligation BondsGeneral Obligation Bonds and

American Tower ProceedsGeneral Obligation BondsGeneral Obligation Bonds andCommunity Development BlockGrant

FTA Grants and Local OperatingFunds

2004 SPORTRAN Capital ImprovementProgram 2.238,104

Total S50.4I7.935

Discretely presented component unit

Activity for the Metropolitan Planning Commission for the year ended December 31, 2004 was asfollows:

Beginning EndingBalance. Increases Decreases Balance

Capital assets, not being depreciated:Land S 704.514 $ - £ - $ 704.514Capital assets, being depreciated:Improvements other than buildings 999,234 - - 999,234Equipment 180.478 - - 180.478Totals, capital assets being depreciated 1,179,712 - - 1,179,712Less accumulated depreciation for:Improvements other than buildings ( 774,643)Equipment ( 117.478)Total accumulated depreciation ( 892.121)Total capital assets, being depreciated,

net 287.591MPC capital assets, net S 992.105

( 55.7551(£55.755)

(817,705)(130.171)f 947.876)

231.836$ 936.350

80

All depreciation was charged to planning and zoning.

Activity for the Downtown Development Authority for the year ended December 31, 2004 was offollows:

Capital assets, not being depreciated:LandConstruction in processTotals, capital projects not being

depreciatedCapital assets, being depreciated:Leasehold improvementsBuildingsOffice equipment and furnitureStreetscape equipmentParking program equipmentTotals, capital assets being depreciatedLess accumulated depreciation for:Leasehold improvementsBuildingsOffice equipment and furnitureStreetscape equipmentParking program equipmentTotal accumulated depreciationTotal capital assets, being depreciated,

netDowntown Development Authority

capital assets, net

Depreciation expense was charged to

Downtown developmentStreetscape programParking program

Total

BeginningBalance

$ 299,000687.867

986,867

52,369292,44891,87284,26481.842

602,795

( 8,874)( 5,410)( 73,434)( 52,747)( 43.682)( 184.147)

418.648

SI. 405.5 15

Increases Decreases

$ - $ -( 687.867)

( 687,867)

- -699,138

2,221-_ —

701,359

C 1,746)( 31,578)( 6,882)( 6,802)f 11.691)( 58,699)

642.660

S642.660 f £687.867)

EndingBalance

$ 299,000-

299,000

52,369991,58694,09384,26481.842

1,304,154

( 10,620)( 36,988)( 80,316)( 59,549)( 55.373)( 242.846)

1.061.308

$1.360.308

functions/programs as follows:

$40,2066,802

11.691$58.699

F. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of December 31,2004 is as fol lows:

81

Due to/from other funds:

Receivable FundCommunity DevelopmentGeneral Fund1999A General Obligation BondsNonmajor governmental funds

Nonmajor enterprise fundsInternal service funds

Fiduciary funds

Total

Payable FundGeneral FundRetained RiskNonmajor governmental fundsNonmajor governmental fundsCommunity DevelopmentGeneral FundHealth Care Trust FundFleet ServicesWater and SewerFiduciary Funds2003A General Obligation BondsGeneral FundGeneral FundAirportWater and SewerageGeneral Fund

Amount$ 32,649

5,680,099266,923

6,068,266596,89572,888

1,776,276329,884893,017

3,072,089315,564660,766

5,154,37454,426

614,267356.317

$25.944.700

These balances resulted from the time lag between the dates that (1) interfund goods and servicesare provided or reimbursable expenditures occur, (2) transactions are recorded in the accountingsystem, and (3) payments between funds are made.

Interfund transfers;

Transfer out:

Transfer in:

General FundCommunity DevelopmentDebt ServiceNonmajor governmentalMunicipal and Regional

AirportNonmajor enterprise

Total transfers

GeneralFund

2,360,9467,034,346

32,845

124,1004.488.379

CommunityDevelopment

602,358

S602.358

2003ANonmajor General

Governmental ObligationFund Bonds

$ 3,254,339

8,368,7387,736,601

100.000

Water andSewer

InternalService Total

K - $1,050,000 $5,680,099 $9,984,438- - - 2,360,946- - - 15,403,084

3,781,971 - - 12,153,775

- - - 124,100- - - 4.588.379

SI9.459.678 S3.781.97I SI.050.000 S5.680.099 $44.614.722

82

Transfers are used to (1) move revenues from the fund that statute or budget requires to collectthem to the fund that statute or budget requires to expend them, (2) move receipts restricted todebt service from the funds collecting the receipts to the debt service fund as debt servicepayments become due, and (3) use unrestricted revenues collected in the General Fund to financevarious programs accounted for in other funds in accordance with budgetary authorizations.

G. Capital Leases

In August 2004, the City entered into a lease agreement for $4,586,126 for financing theacquisition of 42 packer trucks and two vehicles with no down payment. In December 2004, theCity entered into a lease agreement for $1,521,000 for financing the acquisition of five fire trucksto be delivered in 2005, with no down payment. The City previously entered lease agreementsin 2001 and 2002 for equipment acquisitions. The lease agreements qualify as capital leases foraccounting purposes and, therefore, have been recorded at the present value of their futureminimum lease payments as of the inception date. The payment schedule below includes all ofthe current leases in effect at year end.

The assets acquired through the capital leases follow:

Governmental Water andActivities Sewerage

Equipment purchased to date $10,767,200 $254,642Less: Accumulated depreciation (4.870.706) (254.642)

Total $ 5.896.494 $ -

The future minimum lease obligations and the net present value of these minimum lease paymentsas of December 31,2004 were as follows:

Governmental Water andEnding December 31. Activities Sewerage

2005 $ 2,353,638 $ 59,6382006 2,547,325 59,6382007 2,547,377 59,5882008 1,190,1192009 1,190,1192010-2014 968,4392015 193.688 -

Total minimum lease payments 10,990,705 178,864Less: amount representing interest ( 1.104.216) f 17.396)

Present value of minimum leasepayments $ 9.886.489 $161.468

H. Long-term Debt

Changes in long-term liabilities

83

Long-term liability activity for the year ended December 31, 2004 was as follows:(in thousands of dollars)

Governmental activities:General obligation bondsLess unamortized discountLess deferred amounts

on refundingPlus deferred premium

Total bonds payableCertificate of indebtednessLess unamortized discount

Total certificates of indebtednessInstallment purchase agreementCapital leaseNotesNet pension obligationLandfill postclosure careClaims and judgmentsCompensated absences

Governmental activity(Less: Community

Development)Community Development notes

Total long-term liabilities

Business-type activities:Municipal and Regional Airports:

Revenue bondsCompensated absences

Municipal and Regional Airports -long-term liabilities

Water and Sewerage:General obligation bondsUnamortized discount -

General obligation bondsRevenue bondsUnamortized discount -

Revenue bondsLess deferred amounts

on refundingPlus deferred premiumTotal bonds payableCapita! leaseCompensated absences

Water and Sewerage -long-term liabilities

Other business-type activityprograms:Compensated absences

Business-type activitylong-term liabilities

BeginningBalance

$311,511( 5,370)

( 1,358)1.067

305,85038,785

—

ss 38,785517

4,95936,354

2322,113

11,9771.956

402,7438.464

$411.207

BeginningBalance

§:$ 23,665

149

23.814

354

( 18)135,157

( 4,329)

( 5,500)3.873

129,537210425

130.172

235

SI 54.221

Additions

$24,715-

( U325)588

23,9785,375

( 54)5,321

-6,1071,2951,257

42925,770

353

64,510450

$64.960

Additions

$ -24

24

-

_

43,710

-

( 100)551

44,161-80

44.241

216

$44.481

Reductions

($46,378)1,808

141( HI)( 44,540)( 2,970)

—( 2,970)( 517)( 1,179)( 874)( 11)

-( 26,657)( 333)

( 77,081)( 799)f$77.880)

Reductions

($ 530)( 24)

( 554)

( 177)

18( 19,775)

563

532( 357)( 19,196)( 48)( 76)

( 19.320)

C 196)

($20.070)

EndingBalance

$289,848( 3,562)

( 2,542)1.544

285,28841,190

( 54)41,136

-9,886

36,7761,4782,542

11,0901.976

390,1728.115

$398.287

EndingBalance

$23,135149

23.284

177

159,092

( 3,766)

( 5,068)4.067

154,502162429

155.093

255

$178.632

Due WithinOne Year

$18,818( 26)

( 244)185

18,7333,255

( 3)3,252

-2,075

923--

11,090367

36,440945

$37.385

Due WithinOne Year

$ -24

24

177

_12,045

-

C 550)458

12,1305177

12.258

212

$12.494

84

Internal service funds predominantly serve the governmental funds. Accordingly, long-termliabilities for them are included as part of the above totals for governmental activities. The claimsand judgments liability will be liquidated through the City's Employees Health Care Fund and theRetained Risk Fund. These funds will finance the payment of these claims by charging otherfunds based on the origination of the claims. The General Fund normally bears approximately84% of these costs. At year end $83,971 of internal service funds compensated absences areincluded in the above amounts. For the governmental activities, the balance of compensatedabsences are generally liquidated by the General Fund. Net pension obligation and landfill post-closure care will also be liquidated by the General Fund.

There are a number of limitations and restrictions contained in the various bond indentures. TheCity is in substantial compliance with all significant limitations and restrictions.

State law allows a maximum of 10% of the assessed valuation for general obligation bonded debtfor any purpose. However, the 10% maximum can be exceeded if the aggregate issued for allpurposes does not exceed 35% of the total assessed valuation. A total of approximately$114,262,024 of additional general obligation bonded debt is available for issuance on a totalassessed valuation of $1,105,690,930 pursuant to the 35% limitation. Included in the totalassessed valuation of property within the City is $8,808,680 of assessed valuation which has beenadjudicated to Caddo Parish. The table below shows the computation of the City's legal debtmargin calculated at 10% of assessed valuation as of December 31,2004.

Street ImprovementsPolice and FireWater and Sewer

ImprovementsParks and RecreationPublic BuildingsDrainageSanitation and IncineratorIndustrial BondAirportsSportranRiverfront Park

Debt limit-10% ofassessed value forany one purpose

$110,569,093110,569,093

110,569,093110,569,093110,569,093110,569,093110,569,093110,569,093110,569,093110,569,093110,569,093

Deduct - Amountof debt applicable

to debt limit

$94,886,10229,842,617

30,58417,491,04575,414,26750,322,717

39,3584,512

19,365578,122

4,101,113

LegalDebt margin

$15,682,99180,726,476

110,538,50993,078,04835,154,82660,246,376

110,529,735110,564,581110,549,728109,990,971106,467,980

85

The annual requirements to amortize all debt outstanding as of December 3!, 2004, including interest requirementsare as follows:

Maturities(thousands of dollars)

PRINCIPAL REQUIREMENTS:GENERAL OBLIGATION DEBT:

General Obligation Bonds Applicable to;All Purposes other than Water and Sewerage:

1985A Refunding Issue - 5.00-9.375%Less: Unamortized Discount

1987A Refunding Issue - 5.00-8,30%Less: Unamortized Discount

1995 Refunding Issue-3.90-5.20%1996 Issue-5.20-8.00%1997 Issue-4.70-8.00%1998 Issue-4.30-8.00%1998 Refunding Issue - 3.65-4.85%1999 Issue-4.10-5.00%1999A Issue-5.00-6.125%1999 Refunding Issue - 4.00-5.00%2001A Issues-3.45-5.50%

2003A Refunding Issue - 2.375-5.00%Less: Deferred Amount on RefundingPlus Unamortized Premium

2003B Refunding Issue - 2.00-5.25%Less: Deferred Amount on RefundingPlus: Unamortized Premium

2003A Issue-3.00-6.00%Plus: Unamortized Premium

2004A Refunding Issue - 3.00-4.50%Less: Deferred Amount on RefundingPlus: Unamortized Premium

2004B Refunding Issue - 3.00-5.00%Less: Deferred Amount on RefundingPlus: Unamortized Premium

Water and Sewerage1985A Refunding Issue - 5.00-9.375%

Total General Obligation Bonds

Total

$3,443 $(26)

3,417

17,760 (1)(3,536)14,224

1,2601,3503,260

20,1258,165

33,37575,3859,695

29,790

15,385(452)168

15,101

10,325(786)513

10,052

35,815290

36,105

17,060(1,143)

21316,130

7,655(161)360

7,854

177

285,465

2005

3,443 $(26)

3,417

—--~

1,260655

1,025980

1,0001,5303,325

8901,175

1,925(50)

191,894

110(70)4686

1,24032

1,272

145(92)

1770

115(32)71

154

177

18,910

2006

$

-

--

4,840(376)

4,464

-695

1,0851,0351,0401,6103,510

9301,230

1,980(50)

191,949

HO(70)4686

1,29532

1,327

150(92)

1775

1,355(32)71

1,394

--

20,430

2007

~

--

3,230(485)

2,745

--

1,1501,0951,0951,6953,710

9751,290

2,045(50)

192,014

840(70)46

816

1,35032

1,382

155(92)

1780

1,410(32)71

1,449

-

19,496

2008

$ - $-

--

3,230(699)

2,531

---

1.1601,1551,7803,9201,0151,350

1,965(50)19

1,934

865(70)46

841

1,41032

1,442

1,370(92)

171,295

1,490(32)71

1,529

-

19,952

2009

-

--

3,230(897)

2,333

----

,225,215,870

4,145,060,415

2,045(50)19

2,014

895(70)46

871

1,47532

1,507

1,420(92)17

1,345

1,560(32)71

1,599

-

20,599

86

2010-

2014

Maturities(thousands of dollars)

2015- 2020-2019 2024

2025-2029

2030-2034

3,230(1,079)2,151

7,2302,660

10,90024,5054,8258,165

5,425(202)

__735,296

5,085(350)230

4,965

8,410

!.30_8,540

8,065(460)J5

"7,690

1,725( I )5

i.729

7,400

13,99032,270

10,320 4,845

2,420(86)53

2,387

10,465 10,170

IO.TTO"

5,755(223)

435,575"

88,656 82,407 15,015

87

Maturities(thousands of dollars)

General Obligation Notes1998A Certificate oflndebtedness - 4.65-5.25%1998B Certificate oflndebtedness - 5.79-6.48%1999 City Halt Project Notes - 4.75-7.00%Property Acquisition - 4.77%2000 Independence Stadium - Variable2000A Independence Stadium - VariableCapital Lease - 5.29%Suntrust Lease/Purchase - 3.68%Convention Center Hotel Mote - VariableBane One Lease/Purchase - 3.07%Community Bank Lease/PurchaseCapital Lease - Water and Sewerage - 5.29%2004 Certificate of Indebtedness - 2.0-4.2%Less: Unamortized Discount

Total General Obligation Debt

Municipal and Regional Airports1997A Issue-5.375%1997B PFC Issue - 4.20-5.375%

Total Revenue Bonds - Airports

Waicr and Sewerage

I993B Issue-4.25-9.00%

1997A Refunding Issue - 4.00-5.40%Less: Deferred Amount on Refunding

2000A Issue - 5.00-7.00%2001A Issue-3.95%2001B Issue-3.95%2001C Issue-3.95%2002A Issue-3.95%2002B Issue - 3.95%2003A Issue-3.95%

2002A Refunding Issue - 4.00-4.65%Less: Unamortized DiscountLess: Deferred Amount on RefundingPlus: Unamortized Reoffer Call Premium

2003A Refunding Issue - 4.00-5.00%Less: Deferred Amount on RefundingPlus: Unamortized Reoffer Call Premium

2003B Refunding Issue - 2.00-5.00%Less: Deferred Amount on RefundingPlus: Unamortized Original Issuance Premium

Total

30,2705,5455,615186

24,5904,915286

3,4931,4704,5861,521162

5,375(54)

5,321373,425

7,39015,745 (2)23,135

6,160

5,535(296)5,2399,0506,5206,5202,22310,9302,24612,108

16,725(3,766)(814)135

12,280

40,735(2,448)2,29640,583

18,495(1,336)617

17,776

2005

*.

3,055680571453091

1,12211862-

51200(3)

19725,21 1

--

530

905(30)875255255255205

—--

..-(116)19(97)

6,080(245)230

6,065

1,605(134)62

1,533

2006

7602,490715621503095

1,1641188911354255(3)

25227,215

555555

565

950(30)920265265265210

---_

~("16)19(97)

6,320(245)230

6,305

1,640(134)62

1,568

2007

3,445

-7556715530100

1,20711

91613057260(3)

25726,626

580580

600

845(30)815280275275220

~-

-

170-

(116)1973

5,790(245)230

5,775

1,680(134)62

1,608

2008

3,620~

800-

16030

—"11945136

-270(3)

26725,921

610610

635

635(30)605300285285225

---

2,200(359)(116)

191,744

4,895(245)230

4,880

1,725(134)62

1,653

2009

3,800--

840--

17035

----

n974142

-275(3)

27226,843

635635

675

475(30)445315300300235

~--

--

3,755(725)(116)19

2,933

3,635(245)230

3,620

1,775(134)62

1,703

Maturities(thousands of dollars)

2010-

2014

15,500

1,825

1,575315

442

814

1,500(13)

1,487110,614

3,6853,685

3,155

1,725(146),579,880,680,680,128

--2,2462,781

10,600(2,682)

(234)40

7,724

14.015(1,221)1,146

13,938

10,070(666)307

9,711

2015-

2019

3,145

--

3,485695

442

186

1,790

(13)1,777

92,137

4,7254,725

..

~-2,4752,0352,035

~7,522

~4,142

..-------

~-~-_

---

2020- 2025- 2030-

2024 2029 2034

-

..

6,195 9,990 2,5651,235 2,000 515

442 89

~

825(13)812

23,699 12,079 3,080

1,180 6,2104,9556,135 6,210

„ .- ~_ _

„

3,2801,4251,425..3,408..

5,027 158

._

..--„--

„--„

-_

..__..

89

Maturities(thousands of dollars)

Total11,105

(74)468

1M99

10,740(100)551

11,191

154,325

550,885

134,793

52,13017,477 (2)

204,400

$755,285

2005925

(7)47

965

1,030(18)100

1,112

11,953

37,164

15,458

6,656-

22,114

$59,278

2006960

(7)47

1,000

1,780(17)100

1,863

13,129

40,899

14,979

6,0731,211

22,263

$63,162

20071,000

(7)47

1,040

1,855(18)100

1,937

12,898

40,104

14,044

5,5681,185

20,797

$60,901

2008i,040

(7)47

1,080

1,925(17)100

2,008

13,700

40,231

13,210

5,0031,158

19,371

$59,602

20091,085

(7)47

1,125

2,025(18)100

2,107

13,758

41,236

12,335

4,4701,129

17,934

$59,170

2003C Refunding Issue - 4.00%Less: Deferred Amount on RefundingPlus: Unamortized Reoffer Call Premium

2004B Refunding Issue - 4.00-5.00%Less: Deferred Amount on RefundingPlus: Unamortized Reoffer Call Premium

Total Revenue Bonds -- Water and Sewerage

Total Principal

INTEREST REQUIREMENTS:General Obligation DebtRevenue Bonds and Notes

Water and SewerageMunicipal and Regional AirportsTotal Interest Requirements

Total Future Debt Requirements

1I) The principal and interest for the 1987A General Obligation Bond Issues which were due January 1, 2005were paid as of December 31,2004; therefore, there were no requirements for 2005.

(2) The principal and interest for the 1997BPFC Revenue Bonds due January 1,2005 were paid as ofDecember 31, 2004; therefore, there were no requirements for 2005.

90

Maturities(thousands of dollars)

2010-2014

2015- 2020- 2025- 2030-2019 2024 2029 2034

6,095(39)233

6,289

2,125(12)51 -

2,164

55,955 18,209 14,565 158

170,254 115,071 44,399 18,447 3,080

41,193

15,634

_ 5'142

61.969

$232,223

17,636

6,6544,103

28,393

_ $143,464

4,811

2,0692,6939.573

$53,972

1,091

3856

1.950

$20,397

36

36

$3,116

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General Obligation BondsGeneral obligation bonds are direct general obligations of the City. Principal and interest are payable fromad valorem taxes levied on all taxable property within the City. As discussed in the following paragraphs,certain of the bond issues are currently being paid from sources other than ad valorem tax levies; however,ad valorem taxes are pledged should payment not be made from those other sources.

Certain of the general obligation bonds were issued for capital improvements of the Department of Waterand Sewerage. The entire amount of future debt service relating to these bond issues will be paid fromthe operations of the Department of Water and Sewerage. Accordingly, this debt has been included in thefinancial statements of the Enterprise Funds.

On December 1,1985, the City issued $ 125,781,623 in General Obi igation Refunding Bonds, Series 1985of which $6,660,000 were recorded on the financial statements of the Department of Water and SewerageFund. The proceeds, along with other monies from the City, were used to refund all prior outstandinggeneral obligation bonds except for one series of the 1962 bonds which were issued to finance anindustrial plant which was leased to a private entity. The refunded bonds are considered to be defeasedand have been removed from the governmental activities column of the Statement of Net Assets. Theprincipal outstanding at December 31,2004 on the bonds refunded was $3,355,000.

On July 17, 1987, the City issued $17,203,141 in General Obligation Refunding Bonds, Series 1987 toadvance refund $17,100,000 of outstanding 1986 Series A Bonds. The 1986 Series A Bonds areconsidered to be defeased and have been removed from the governmental activities column of theStatement of Net Assets. The principal outstanding at December 31, 2004 on the bonds refundedwas $3,000,000.

In November 2003, the City issued $10,515,000 in General Obligation Refunding Bonds, Series 2003Bto advance refund a portion of the outstanding General Obligation Bonds, Series 1996. The amountrefunded was $9,835,000 with maturities from 2007 through 2016. These bonds will be called forredemption in 2006 and are considered defeased and have been removed from the governmental activitiescolumn of the Statement of Net Assets. The principal outstanding at December 31,2004 on the bondsrefunded was $9,835,000.

In October 2004, the City issued $17,060,000 in General Obligation Refunding Bonds, Series 2004A toadvance- refund a portion of the General Obligation Bonds, Series 1997 and to pay for the costs ofissuance. Included in the proceeds was a reordering premium of $215,816. The amount refunded was$ 16,000,000 with maturity dates from 2008 through 20 i 7. The refunding bonds have maturity dates from2005 through 2017 with principal payments from $145,000 to $2,005,000 with interest rates from 3.00%to 4.50%. Existing sinking funds of $328,184 along with the net proceeds of $16,830,560 were placedin an irrevocable trust for future debt service payments of the refunded bonds. Proceeds of $49,557 fromthe refunding bonds were recorded to the original 1997 General Obligation Bond Fund due to excess fundsgenerated by a change in interest rates. These bonds will be called for redemption in 2007 and have beenremoved from the governmental activities column of the Statement of Net Assets. The reacquisition priceexceeded the net carrying amount of the old debt by $ 1,158,744. This amount is being netted against thenew debt and amortized over the life of the new debt which is the same as the refunded debt. Therefunding was undertaken to reduce the future debt service payments by $679,341 and resulted in a neteconomic gain of $535,814. The principal outstanding at December 31,2004 on the bonds refunded was$16,000,000.

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In November 2004, the City issued $7,655,000 in General Obligation Refunding Bonds, Series 2004B toadvance refund a portion of the General Obligation Refunding Bonds, Series 1995 and to pay for the costsof issuance. Included in the proceeds was a reoffering premium of $372,301. The amount refunded was$7,640,000 with maturities from 2006 through 2010. The refunding bonds have maturity dates from 2005through 2010 with principal payments from $ 115,000 to $ 1,725,000 with interest rates 3.00% to 5.00%.The net proceeds of $7,806,529 were placed in an irrevocable trust for future debt payments of therefunded bonds. These bonds will be called for redemption in 2005, and have been removed from thegovernmental activities column of the Statement of Net Assets. The reacquisition price exceeded the netcarrying amount of the old debt by $166,529. This amount is being netted against the new debt andamortized over the life of the new debt which is the same as the refunded debt. The refunding wasundertaken to reduce the future debt service payments by $360,771 and resulted in a net economic gainof $337,617. The principal outstanding at December 31, 2004 on the bonds refunded was $7,640,000.

General Obligation NoteIn December 2004, the City issued $5,375,000 in Certificates of Indebtedness, Series 2004 for the purposeof financing energy saving capital expenditures and paying the costs of issuance. The certificates arepayable from an irrevocable pledge and dedication of the excess of annual revenue above statutory,necessary and usual charges in each fiscal year during which the certificates are outstanding and any otherlegally available excess revenues. The certificates were issued at a discount of $53,910. Principalpayments range from $200,000 to $420,000 with interest rates of 2.0% to 4.2% and maturity dates from2005 through 2021.

In December 2002, the City entered into a Loan Agreement for $2,500,000 with the Louisiana LocalGovernment Environmental Facilities and Community Development Authority, The loan was made tofund a portion of the cost of the Convention Center Hotel. The loan is made through advances asexpenditures are incurred. The final maturity is March 2025. Interest is payable only on funds advancedagainst the loan. Interest is computed weekly based on the Bond Market Association (BMA) MunicipalSwap Index and is payable monthly along with an amortized amount of principal outstanding. The amountadvanced in 2004 was $1,295,025 and to date totals $1,477,974 with total principal payments of $9,100.Debt service is prorated through 2025 based on the outstanding principal at a rate of 3.43% which was therate at year-end.

In March 2000, the City entered into a Loan Agreement for $25,000,000 with the Louisiana LocalGovernment Environmental Facilities and Community Development Authority. The Authority issued$25,000,000 of its Revenue Bonds (City of Shreveport/Independence Stadium Project) Series 2000 forthe purpose of constructing, renovating, and equipping improvements to Independence Stadium, includingequipment, furnishings, fixtures, and facilities incidental or necessary and paying the costs of issuance ofthe bonds. Through the loan agreement, the City agrees to make these payments from any lawfullyavailable funds and to budget these amounts annually. The debt schedule for annual requirements assumesan interest rate of 2.29% which was the rate in effect at December 31, 2004. In October 2003, the Cityentered into an Interest Rate Swap Transaction with JP Morgan Chase Bank. The bank converted thebonds to a term rate made with the same maturities through September 1,2008. The City will continueto pay variable rate interest based on the Bond Market Association (BMA) Municipal Swap Index plus.30 percent. If the bonds are not remarketed at the end of the term rate period, the term rate shall be 8.00%until remarketed. There are no external events to change this transaction, and the City will pay a lowerinterest rate and will not require a standby purchase agreement or a remarketing agreement.

In December 2000, the City entered into a Loan Agreement for $5,000,000 with the Louisiana LocalGovernment Environmental Facilities and Community Development Authority. The Authority issued$5,000,000 of its Revenue Bonds (City of Shreveport/Independence Stadium Project) Series 2000A for

94

the purpose of constructing, renovating, and equipping improvements to Independence Stadium, includingequipment, furnishings, fixtures, and facilities incidental or necessary and paying the costs of issuance ofthe bonds. Through the loan agreement, the City agrees to make these payments from any lawfullyavailable funds and to budget these amounts annually. The debt schedule for annual requirements assumesan interest rate of 2.29% which was the rate in effect at December 31, 2004. In October 2003, the Cityentered into an Interest Rate Swap Transaction with JP Morgan Chase Bank. The bank converted thebonds to a term rate made with the same maturities through September 1,2008. The City will continueto pay variable rate interest based on the Bond Market Association (BMA) Municipal Swap Index plus.30 percent. If the bonds are not remarketed at the end of the term rate period, the term rate shall be 8.00%until remarketed. There are no external events to change this transactions, and the City will pay a towerinterest rate and will not require a standby purchase agreement or a remarketing agreement.

Community Development NotesIn March 2004, the City entered into a Section 108 Housing and Urban Development (HUD) guaranteedloan for $2,500,000 for Shreveport Inner City Economic Development Initiative (S1CEDI). The initialdrawdown was for $450,000 in 2004. The loan carries a variable interest rate. The rate in effect at yearend was 2.60%, and is the rate used for the debt schedule.

The City has four other HUD loans received in prior years. The loans are secured by a note receivablefrom the developer with a first lien mortgage and a pledge of the City's current and future CDBG funds.The note receivable and loan payable are recorded in the Community Development Fund due to the flowof funds between the developer, the City, and HUD. The developer makes payments to the City and theCity services the loan to HUD. An allowance for doubtful accounts has been provided for one noteoriginally made for $2,200,000 and still outstanding for the full amount. Another note originally madefor $5,000,000 is not collectible. An amount of $885,000 and $4,500,000 respectively, has been recordedas due from HUD at December 31,2004 in relation to these notes as well as $779,652 for interest paid butnot drawn down at this date.

The debt service requirements to maturity for these loans are as follows:

Year EndingDecember 31 Principal Interest2005 $ 945,000 $ 484,7882006 970,000 438,8222007 990,000 390,3312008 606,000 339,5092009 554,000 305,8982010-2014 2,840,000 999,5802015-2019 1.210.000 198.596

Total S8.115.000

Municipal and Regional Airports Revenue BondsThe resolutions applicable to the Municipal and Regional Airports Revenue Bonds require theestablishment of various bond principal and interest sinking funds and the establishment of a debt servicereserve fund. For financial statement reporting, these funds have been consolidated within the Municipaland Regional Airport fund. Net assets of the Municipal and Regional Airport fund have been restrictedin accordance with the provisions of the respective bond indentures in the amount of $1,771,797 atDecember 31,2004, which represents the restricted assets included in the debt service funds at that datewith no current liabilities payable from these restricted assets.

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The City has covenanted in the General Bond Resolution that it will at all times fix, prescribe and collectrents, fees and oilier charges for Ihc services and facilities furnished by the Airport System sufficient toyield net revenues during each fiscal year equal to at least 125% of debt service for such fiscal year andto yield revenues during each fiscal year equal to at least 100% of the aggregate amounts required to bedeposited during the first year in each account created by the General Bond Resolution.

Restricted assets on the balance sheet of the Municipal and Regional Airport fund primarily representamounts which are required to be maintained pursuant to ordinances relating to bonded indebtedness. Asummary of restricted assets at December 31, 2004 follows:

Fund

Debt Service Reserve Funds $1,771,797Other Miscellaneous Reserve Funds 2,175,097Bond and Interest Sinking Funds 24.132

Total restricted assets S3.971.026

Department of Water and Sewerage Revenue BondsDuring September 1986, the City issued $31,080,000 in Water and Sewer Revenue Bonds 1986 Series Bto advance refund $23,715,000 of the 1984 Series A Bonds. The 1984 Series A Bonds are considered tobe defeased and have been removed from the business activities column of the Statement of Net Assets.The principal outstanding at December 31, 2004 on the bonds refunded was $1,165,974.

In February 2004, the City authorized the issuance of $ 16,000,000 of Water and Sewer Revenue Bonds,Series 2004 A. These bonds are the fourth and final issue of a total of $70,000,000 approved in 2001.The bonds were issued through a Loan and Pledge Agreement with the Louisiana Department ofEnvironmental Quality for the purpose of construction, improvement, rehabilitation, and expansion of thesewer plant and system (the "System") and paying the costs of issuance. Principal payments range from$581,000 to $1,168,000 with an interest rate of 3.45% and an administrative fee of 0.5% for a total of3.95% and maturity dates from 2005 through 2023.

The Louisiana Department of Environmental Quality, as the initial purchaser of the bonds will pay thepurchase price of the bonds in installments as needed to pay the project costs, and interest shall be payableonly on the amount purchased from the date of purchase. At December 31, 2004, the bonds authorizedthat have not been fully purchased and the amount purchased to date are the 2001C $5,540,000($2,602,953), 2002A $25,000,000 ($23,144,317), 2002B $ 13,000,000 ($5,969,255), 2003A $ 16,000,000($15,031,421), 2003B $6,000,000 ($1,096,000), 2004B $16,000,000 ($3,849,000). The amountsdrawndown in 2004 were 2001B ($2,340,670), 2001C ($2,278,054), 2002A ($4,843,342), 2002B($3,928,741), 2003A ($14,684,301), 2003B ($1,046,000), and 2004A ($3,849,000).

In June 2004, the City issued $10,740,000 in Wajer and Sewer Revenue Bonds, 2004 Refunding SeriesB to currently refund and prepay a portion of the outstanding and to be issued Water and Sewer RevenueBonds, Series 2002B, 2003A, 2003B, and 2004A and to pay for the costs of issuance. The amountsrefunded were $3,251,000 of the Series 2002B with maturity dates from 2005 through 2010, $2,923,000of the Series 2003A with maturity dates from 2006 through 2010, $1,096,000 of the Series 2003B withmaturity dates from 2006 through 2010 and $3,849,000 of the Series 2004 A with maturity dates from 2005through 2010. The refunding bonds have maturity dates from 2005 through 2010 with principal paymentsfrom $1,030,000 to $2,125,000 with interest rates of 4.00% to 5.00%. Included in the proceeds was areoffering premium of $601,616. The net proceeds of $11,147,695 were used to refund $6,319,372 ofbonds drawn down and issued plus interest of $15,254 and to provide $4,813,069 to the City as new bondproceeds. These bonds have been removed from the business activities column of the Statement of NetAssets. The rcacquisition price exceeded the carrying amount of the old debt by $ 109,523. This amount

96

is being netted against the new debt and amortized over the life of the new debt which is basically thesame as the refunded debt. The refunding was undertaken to reduce future debt service payments by$134,477 and resulted in an economic gain of $! 19,172.

The Series 2004A and 2004 Refunding Series B Bonds together with the Prior Lien Bonds are securedby and payable solely from the income and revenues to be derived from the operation of the Systemsubject to the prior payment of the reasonable and necessary expenses of operation and maintenance ofthe System.

The resolutions applicable to the Department of Water and Sewerage Revenue Bonds require theestablishment of various bond principal and interest sinking funds and the establishment of a debt servicereserve fund. For financial statement reporting, these funds have been consolidated within the Departmentof Water and Sewerage.

The City has debt covenants with respect to the various Water and Sewer bond issues to fix and collectrates and charges for all water and sewerage services supplied by the System which wil l be sufficient ineach fiscal year, after making due allowance for delinquencies in collection and after providing for thepayment of the reasonable and necessary expenses of operating and maintaining the System, to producenet revenues (i) sufficient to pay debt service on all outstanding city bonds and to maintain the funds andaccounts as provided in the bond resolution and (ii) which result in each fiscal year in the greater of (a)the sum of debt service payable on the city bonds in the ensuing fiscal year plus any required deposit tothe Debt Service Reserve Fund, or (b) a ratio of net revenues to average annual debt service of not lessthan 1.25 to I, the required debt service coverage ratio.

Restricted assets on the balance sheet of the Department of Water and Sewerage primarily representamounts which are required to be maintained pursuant to ordinances relating to bonded indebtedness(construction, debt service, and bond principal and interest sinking funds). A summary of restricted assetsby bond issue at December 31, 2004 follows:

Fund1990A and B Bonds Construction Funds $ 95,0571991A Bond Construction Fund 3,140,045I993B and 1994B Bond Construction Fund 1,898,296Debt Service Reserve Funds 7,225,887Bond and Interest Sinking Funds 1,701,3542000A Bond Construction Fund 2,243,7782001B Bond Construction Fund 4,143,028200IC Bond Construction Fund 1,038,250Miscellaneous Bond Construction Fund 343.514

Total restricted assets £21.829.209

Shreveport Home Mortgage Authority Bonds

On February 1,2004, the Authority issued $4,360,000 in bonds, the 2004 Multi-Family Housing RevenueRefunding Bonds, lo advance refund the $4,360,000 1995 Multi-Family Issue. Bond costs of$ 130,569were paid by the Authority. The 1995 Multi-Family Issue Bonds are considered defeased and have beenremoved from the Authority's financial statements. At December 31,2004, the principal outstanding onthe refunded bonds was $4,340,000.

On March 14,1995, the Authority issued $4,435,000 in bonds, the 1995 Issue (Multi-Family Refunding),to advance refund the $4,360,000 1983-B Issue bearing interest at 6.4% and pay part of the issuance costs

97

of the new bonds. The 1983-B Issue bonds are considered defeased and have been removed from theAuthority's financial statements. At December 31,2004, the principal outstanding on the refunded bondswas $4,360,000.

The 1979 issue bonds are considered defeased and have been removed from the Authority's financialstatements. At December 31, 2004, $37,500,000 of bonds in the 1979 issue are still outstanding.

IV. Other Information

A. Retirement Commitments - Defined Benefit Pension Plans and Defined Contribution Plan

The City of Shreveport administers three defined benefit pension plans: the Firemen's Pension andRelief Fund (FPRF), the Policemen's Pension and Relief Fund (PPRF)and the Employees' RetirementSystem (ERS). These plans do not issue stand-alone financial reports and are not included in thereport of a public employee retirement system or another entity and are therefore included ascombining statements tinder the sections entitled "Combining and Individual Fund Statements andSchedules".

Summary of Significant Accounting Policies

Basis of Accounting - The three City administered pension plans' financial statements arc preparedusing the accrual basis of accounting. Employer and plan member contributions are recognized in theperiod in which employees provide services to the entity. Benefits and refunds are recognized whendue and payable in accordance with the terms of the plan.

Method Used to Value Investments - Investments are reported at fair value. Short-term investmentsare reported at cost, which approximates fair value. Securities traded on a national or internationalexchange are valued at the last reported sales price at current exchange rates. Investments that do nothave an established market are reported at estimated fair value. The cash surrender value of lifeinsurance policies is recorded as an other asset for the FPRF and PPRF. The policies are valued attheir cash value as of the date of the financial statements. The policies provide assets to fund benefitsof the plan.

Concentration of Investments

The FPRF, PPRF and ERS had no investments in any one organization representing 5% or more ofthe fund balance reserved for employees' pension benefits except for obligations of the federalgovernment. There are no investments in loans to or leases with parties related to the pension plans.

Plan Descriptions and Contribution Information

Membership of each plan consisted of the following at December 31, 2004;

FPRF PPRF ERSRetirees and beneficiaries

receiving benefits 301 201Terminated plan members entitled

to but not yet receiving benefits -Active plan members:

Vested 67 4Nonvested __- -

Total 368 205

Number of participating employers 1 1

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Administrative costs of the ERS are financed through contributions from the employer, members andinvestment income. Administrative costs of the FPRF and PPRF are financed through contributions fromthe employer and investment income.

The FPRF, PPRF and ERS do not have any legally required reserves.

Firemen's Pension and Relief Fund

Plan Description - The FPRF is a single-employer defined benefit pension plan that temporarily coversfirefighters who retire after January 1,1983 and meet the eligibility requirements of the local retirementplans but not the State plan.

Until January 1,1983, the Firemen's Pension and Relief Fund provided the primary retirement benefitsfor two groups of employees. Firefighters hired before July 12,1977 were covered under an "Old Plan."Firefighters hired on or after July 12, 1977 were covered by a "New Plan". Under the Old Plan, afirefighter was eligible to retire at any age with 20 years of service. Benefits are payable monthly forlife equal to 50% of the fireman's monthly salary, plus 3 1/3% for each year of service between 20 and25 years, plus 1 2/3% for each year of service between 25 and 30 years. Under the New Plan, afirefighter is eligible lo retire at age 50 with 20 years of service or age 55 with 12 years ofscrvicc.Benefits arc 2 1/2% of three-year average pay times years ofscrvicc up lo 10, plus 3% of each year ofservice over 10. The benefit cannot exceed 85% of final salary. The City guarantees that it will pay thebenefits under the Old and New Plans until the member is eligible for a benefit from the StatewideFirefighters Retirement System. It also guarantees to pay the excess benefit of these plans over theStatewide Firefighters Retirement System.

Disability benefits are payable under the Old Plan on the basis of: (1) temporary total disability in theline of duty, (2) total disability in the line of duty, (3) occupational disability in the line of duty, or (4)total disability not in the line of duty. Disability benefits payable are (I) 66 2/3% of the monthly salary,payable for no more than one year; (2) 66 2/3% of the salary of active members holding the positioncorresponding to that held by the disabled member at the time he became disabled is payable for theduration of the disability or until the member reaches eligibility for retirement on service basis, exceptthe benefit will end as of the time when the member would have completed 30 years of service; (3) 50%of salary of active members holding the position corresponding to that held by the disabled, not to exceed66 2/3% of first class hoseman's salary, payable for duration if disability or until eligible for serviceretirement: and (4) 25% of salary of active members holding the position corresponding to that held bythe disabled member at the time he became disabled, plus an additional 2% of such salary for each yearof service over 5 years, but not to exceed 50% of a first class hoseman's salary payable for the durationof the disability. Under the New Plan, the disability benefit is (1) 60% of the fireman's monthly salaryor (2) 75% of the accrued benefit. The City guarantees it will pay any excess of the benefits of this planover the Statewide Firefighters Retirement System.

Under the Old Plan, death benefits equal to 50% of a beginning fireman's salary are payable to asurviving spouse. The City guarantees that it will pay this benefit for each fireman holding a guaranteeof benefits contract. Under the New Plan, there is not an automatic benefit provided. Death benefits arebased on the option chosen by the member at retirement.

There was not a vesting provision under the Old Plan. Members were eligible for benefits only afterserving the time requirement for normal retirement. Under the New Plan, members vest after twelveyears service and may receive a benefit at age 50 with twenty years service or at age 55 with a minimumof twelve years service. Benefits are established and may be amended by State statutes.

The guaranteed benefits are paid to a closed group of firefighters. A significant part of the guaranteedbenefits are the temporary benefits payable unt i l age 50. The value of these temporary benefits canfluctuate widely, since it directly depends upon how many people retire before age 50.

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Only the employer makes contributions on a pay-as-you-go basis. The employer contribution obligationsare established and may be amended by State statutes. Contributions are made from the General Fund.The City's contribution rate is currently 30.5% of annual covered payroll.

Annual Pension Cost and Net Pension Obligation - The City's annual pension cost and net pensionobligation to FPRF for the current year were as follows:

Annual required contribution $ 1,228,535Interest on net pension obligation 20,868Adjustment to annual required contribution f 32.381)Annual pension cost 1,217,022Contributions made 1.228.535Decrease in net pension obligation ( 11,513)Net pension obligation beginning of year 231.868Net pension obligation end of year $ 220.355

The net pension obligation is $220,355 at December 31, 2004, and it is recorded in the governmentalactivities of the government-wide statement of net assets.

The annual required contribution for the current year was determined as part of the December 31,2004actuarial valuation using the projected unit credit actuarial cost method.

Three-Year Trend Information

Annual Percentage NetPension of APC Pension

Cost Contributed Obligation

12/31/02 $ 680,210 100.3% $242,43012/31/03 866,648 101.2 231,86812/31/04 1,217,022 100.9 220,355

Policemen's Pension and Relief Fund

Plan Description - The PPRF is a single-employer defined benefit pension plan that temporarily coverspolicemen who retire after January 1,1983 and meet the eligibility requirements of the local retirementplans but not the state plan.

Until July 12, 1977, all police officers hired became participants in the plan as a condition ofemployment. After July 12, 1977, all new policemen were placed directly into the Slate's MunicipalPolice Employees' Retirement System (MPERS). Currently only policemen who retire after January 1,1983, and who meet the eligibility requirements for a retirement benefit from the local plan but not thestate plan, are being paid from this fund. Under this plan, a policeman hired before 1969 can retire atany age with 20 years of service; policemen hired after 1968 can retire at any age with 25 years ofservice. Benefits are payable monthly at 66 2/3% of monthly salary, plus an additional 0.833% for eachyear of service over 20 served after July 12, 1977. An additional 1.66% is paid for each year of serviceover 25 if the employee was hired after 1968. The benefit cannot exceed 75% of the policeman'smonthly salary. The City guarantees that it will pay the benefit under this plan until the member iseligible for the Municipal Police Employee's Retirement System. It guarantees to pay the excessbenefits, if any, of this plan over the Municipal Police Employee's Retirement System for the life of themember.

100

Disability benefits are payable on the basis of: (1) temporary total disability in the line of duty; (2) totaland permanent disability in the line of duty; and (3) occupational disability that is total and permanentand received in the line of duty which renders the member unable to function in his police duties.Benefits payable are: (I) 66 2/3% of monthly salary of active member holding a position correspondingto that which had been held by a disabled member at the time he became disabled. Payments will bemade for no more than one year or benefits will continue until member becomes eligible for serviceretirement; or (2) 50% of monthly salary of active member holding a position corresponding to thatwhich had been held by a disabled member at the time he became disabled. Benefits will continue untilmember becomes eligible for service retirement. The City guarantees that it will pay any excess of thebenefits of this plan over the MPERS.

A death benefit is payable to a surviving spouse equal to 50% of a beginning policeman's salary. TheCity guarantees that it will pay this benefit for each policeman holding a guarantee-of-benefits only afterserving the time requirement for normal retirement. Benefits are established and may be amended byState statutes.

The guaranteed benefits are paid to a closed group of policemen. A significant part of the guaranteedbenefits are the temporary benefits payable until age 50.

Only the employer makes contributions. The employer contribution obligations are established and maybe amended by State statutes. The funding approach is to amortize all benefits over 25 years. However,the contribution cannot be less than the expected benefit payments for the year. Contributions are madefrom the General Fund. The City's contribution rate is currently 384.6% of covered payroll.

Annual Pension Cost and Net Pension Asset - The City's annual pension cost and net pension asset toPPRF for the current year were as follows:

Annual required contribution $ 1,235,533Interest on net pension asset ( 79,015)Adjustment to annual required contribution 122.606Annual pension cost 1,279,124Contributions made 1.235.533Decrease in net pension asset ( 43,591)Net pension asset beginning of year 877.948Net pension asset end of year $ 834,.3|7

The net pension asset is $834,357 at December 3 \, 2004, and it is recorded in the governmental activities

of the government-wide statement of net assets.

The annual required contribution for the current year was determined as part of the December 31,2004actuarial valuation using the projected unit credit actuarial cost method.

Three-Year Trend Information

Annual Percentage NetPension ofAPC Pension

Cost Contributed Asset

12/31/02 $ 770,917 98.8% $917,93912/31/03 844,345 95.3 877,94812/31/04 1,279,124 96.6 834,357

101

Employees' Retirement SystemPlan Description - The ERS is a cost-sharing multiple employer defined benefit pension plan that coversall full-time classified employees of the City other than policemen and firemen and is administered bythe City.

Non-City employees employed by the following organizations may become members in the system:Caddo Parish Library, Caddo-Shreveport Sales and Use Tax Commission, Caddo-Bossier Civil DefenseAgency, Metropolitan Planning Commission, and other non-City employees recommended by the Boardof Trustees and approved by the City Council. Appointed officials of the City and the Mayor have theoption to join by filing an application within 90 days after taking office. However, by joining theretirement system, they may not participate in the deferred compensation program for appointedemployees.

Prior to October 1, 1999, to be eligible for regular retirement benefits, members must have 30 years ofservice regard less of age or be age 65 with 10 years of service, and if hired before January I, 1979 be55 years of age with 20 years of service. If hired on or after January 1,1979 members must be 55 yearsof age with 25 years of service or age 60 with 20 years of service. As of October 1,1999, eligibility forregular retirement has been extended to any member who has 20 years of service al age 55. Thedifference before and after a hire of January I, 1979 has been eliminated. Members become vested inthe system after ten years of creditable service. Benefit provisions are established and may be amendedby City ordinance.

Benefits available to members hired before January 1,1996, consist of an annuity, which is the actuarialequivalent of the employee's accumulated contributions; plus an annual pension, which together withthe annuity, provides a total retirement allowance equal to 3% of average compensation times years ofcreditable service. Beginning January 1, 1996, the retirement allowance was increased to 3 1/3% ofaverage compensation times years of creditable service for 1996 and future years of service. An earlyretirement provision has been implemented for any member who has at least ten years of service and iswithin ten years of a member's normal retirement age. The benefit is reduced. The plan allows memberswho have met eligibility requirements to defer receipt of benefits until termination. At December 31,2004, there is $1,716,494 being held for members in the Deferred Retirement Option Plan.

Prior to October 1, 1999, plan members were required by City ordinance to contribute 9% ofcompensation to the Plan. The City or other employers were required by the same ordinance tocontribute 9.15% of compensation. As of October 1, 1999, member contributions were reduced to 5%of compensation while the City and other employers continued with a 9.15% total rate which is allocatedbetween the Plan and the ERS Employer Contribution Plan which is a savings plan for members. Underthis new employer allocation, 5.1 % is contributed to the retirement plan and up to 4.05% is contributedto the savings plan based on a matching of member contributions. Any amounts not matched arecontributed to the retirement plan. These percentages can vary from year to year based on actuarialevaluations, but in no case will the employer total rate of 9.15% change. Contribution amounts fromplan members, the City and other employers may be amended by City ordinance. Effective October I,2002, the City's contributions to the savings plan were temporarily suspended in order to provideadditional funding for the retirement plan. This increases the contribution to the retirement plan backto the full 9.15%. Contributions are made from the fund that the employee is paid from or from theorganizations noted above. The contribution rate is currently 9.2% of annual covered payroll.

In February 2004, an ordinance was passed which changed the method of computation for cost-of-livingincreases. The new computation states that effective January 1 of each year, there wil l be a cost-of-livingincrease based on the Consumer Price Index (CPI) if certain conditions exist: I) the CPI has increaseda minimum of one percent 2) the funded percentage for the retirement system for the prior year is not

102

under ninety percent 3) the retirement systemsoverall rate of return on investments for the prior year wasequal to or exceeded the actuarial interest rate for funding. The maximum increase is limited to five percent.

Annual Pension Cost and Net Pension Obligation - The City's annual pension cost and net pensionobligation to ERS for the current year were as follows:

Annual required contribution $ 9,233,118Interest on net pension asset ( 372,369)Adjustment to annual required contribution 391,344Annual pension cost 9,252,093Contributions made 3.613.963Decrease in net pension asset (5,638,130)Net pension asset beginning of year 4.380.815Net pension obligation end of year $ 1.257.315

The net pension obligation is $1,257,315 at December 31, 2004 and is recorded in the governmentalactivities of the government-wide statement of net assets.

The annual required contribution for the current year was determined as part of the December 31,2004actuarial valuation using the entry age normal actuarial cost method.

Three-Year Trend Information

Annual Percentage NetPension of APC Pension

Cost Contributed (Asset) Obligation

12/31/02 $4,626,951 55.8% $(9,577,756)12/31/03 8,823,440 41.1 (4,380,815)12/31/04 9,252,093 39.1 1,257,315

Employees^ Retirement System - Employer Contribution Plan

The ERS Employer Contribution Plan is a defined contribution plan that covers the same group ofemployees as described under the ERS plan and is administered by the City. A maximum amount of4.05% of compensation is contributed to the plan based on a matching of member contributions. Thematch is 50% of contributions up to 4% of compensation and 25% of contributions exceeding 4% up toand including 6%. This is a lotal maximum of 2.5%. In addition, all members receive 1.55% ofcompensation with no matching requirements. These percentages can vary from year-to-year based onactuarial evaluations. This plan is established by City ordinance and may be amended. EffectiveOctober 1, 2002, the City's match of up to 2.5% and the non-matching contributions of 1.55% weretemporarily suspended in order to provide additional funding for the retirement plan. Plan members arenot required to contribute. Employer contributions are made from the fund the employee is paid fromor from the organization described under the ERS plan. In 2004, the employing entities made nocontributions.

Statewide Firefighters' Retirement System (SFRS)

Plan DescriptionThe City of Shreveport contributes to the Statewide Firefighters' Retirement System Pension Plan, acost-sharing multiple-employer defined benefit pension plan administered by the Firefighters'Retirement

System. SFRS covers firefighters employed by any municipality, parish, or fire protection district of the

103

State of Louisiana under the provisions of Louisiana Revised Statutes 11:2251 through 2269 effectiveJanuary 1, 1980. Benefits are established and may be amended by State statutes. The SFRS issues apublicly available financial report that includes financial statements and required supplementaryin form at ion. That report may be obtained by writing to the Board of Trustees, Firefighters' RetirementSystem, 2051 Silverside Drive, Suite 210, Baton Rouge, Louisiana 70808-4136 or by calling 504-925-4060.

Funding Policy

Plan members are required to contribute 8% of their annual compensation and the City is currentlyrequired to contribute 24% of annual compensation, excluding overtime but including State supplementalpay. The contribution requirements of plan members and the City are established and may be amendedby the SFRS Board of Trustees. The City's contributions to SFRS for the years ending December 31,2004,2003, and 2002 were $7,990,196, $2,163,591,and $ 1,884,744, respectively, equal to the requiredcontributions for each year. The plans pension liability was determined in accordance with GASBStatement Number 27 and equaled zero before and after the transition.

The City's contribution rate prior to 2003 was 9%, and the City continued to pay this rate through 2004.The City, along with several other cities filed a lawsuit to block the increase in rates, but lost this suitin 2004. The City was required to pay an additional $5,680,099 in 2005 for the years 2003 and 2004.These amounts are reflected in the City's 2004 financial statements.

Municipal Police Employees Retirement System (MPERS)

Plan DescriptionThe City of Shreveport contributes to the Municipal Police Employees Retirement System Pension Plan,a cost-sharing multiple-employer defined benefit pension plan administered by the Municipal PoliceEmployees'Retirement System. MPERS covers any full-time police officer, empowered to make arrests,employed by a municipality of the State and engaged in law enforcement, earning at least $375 permonth excluding state supplemental pay, or an elected Chief of Police whose salary is at least $100 permonth, and any employee of this system may participate in the MPERS. Benefits are established andmay be amended by State statutes. The MPERS issues a publicly available financial report that includesfiiinncial statements and required supplementary information. That report may be obtained by writingto the Board of Trustees of the Municipal Police Employees' Retirement System, 8401 United PlazaBlvd., Room 305, Baton Rouge, Louisiana 70806 or by calling 1-800-443-4248.

Funding PolicyPlan members are required to contribute 7.5% of their annual compensation and the City is currentlyrequired to contribute 21,5% of annual compensation, excluding overtime but including Statesupplemental pay. Prior to July 1, 2003, the City's contribution rate was 9.0%. The contributionrequirements of plan members and the City are established and may be amended by State statute. TheCity's contributions to MPERS for the years ending December 31, 2004, 2003, and 2002 were$4,087,599, $2,716,359, and $ 1,655,856, respectively, equal to the required contributions for each year.The plans pension liability was determined in accordance with GASB Statement Number 27 and equaledzero before and after the transition.

B. Transit System

The Shreveport Area Transit System (Transit System) is managed and operated for the City by amanagement company pursuant to an agreement which expires September 30,2006. Based on terms ofthe agreement, management fees included in operating expenses were $193,187. The City is requiredto reimburse the management company for the excess of expenses over revenues derived from the

104

operation of the Transit System. Pursuant to an agreement between the City of Shreveport and the Cityof Bossier City, Bossier City will pay the Transit System for the excess of expenses incurred overrevenues derived from operations of transit services in Bossier City. The City reimbursed the TransitSystem $3,524,969. Bossier City reimbursed the Transit System $368,855.

C. Post-Employment Health Care Benefits

In addition to providing pension benefits, the City provides medical and dental care coverage for anyretiree who receives a monthly retirement check from one of the City's retirement plans. Retirees mayalso continue to cover their dependents after their retirement. Currently, there are 1,475 retirees who areeligible to receive benefits. The City's contribution is equal to 50% of the cost of the base plan.Provisions of the plan and obligations to contribute are established in the City Charter.

The post-employment medical and dental care benefits are accounted for in the Cily's Health CareInternal Service Fund along with medical and dental benefits for active employees. The benefits arerecognized as expenses when claims are incurred. At year-end, an estimate is made for incurred but notreported claims. The actual cost of the post-employment benefits is based directly on the amount ofclaims actually incurred. The costs are funded on a pay-as-you-go basis. For 2004, the total costs to theCity for the retirees' medical premium and dental benefits were $2,748,542.

D. Contingencies

LitigationThe City isadefendant in various lawsuits in addition to those accrued in the Retained Risk Fund. Theselawsuits have not been accrued because the amount of the loss cannot be reasonably estimated at thistime. It is the City's opinion that resolution of these matters will not have a material adverse effect onthe financial condition of the City.

Grant DisallowancesThe City participates in a number of federally assisted grant programs, principal of which are theWorkforce Investment Act, Community Development Block Grant, and various construction grants.These programs are subject to program compliance audits under the Single Audit Act. Such audits couldlead to requests for reimbursement by the grantor agency for expenditures disallowed under terms of thegrants. City management believes that the amount of disallowances, if any, which may arise from futureaudits will not be material.

E. Landfill Closure and Post-Closure Care Cost

Slate and federal laws and regulations require the City to place a final cover on its Woolworth Roadlandfill site when it stops accepting waste and to perform certain maintenance and monitoring functionsat the site for thirty years after closure. The City has entered into a sanitary landfill services contractwith a contractor. The contractor is responsible for the operation and closure of that portion of thelandfill on which it conducted operations. The City is responsible for the maintenance and constructionof all monitoring facilities and the conduct of all monitoring programs. If the contractor defaults on thecontract, the City would be liable for all costs. We have reviewed the financial capability and stabilityof the contractor to ensure that the contractor will be able to meet the closure obligations when they aredue. We believe that the contractor wil l be able to meet the obligations.

The City expects to close the landfill in the year 2025 which is an estimated remaining life of 21 years.The $2,542,388 reported at December 31,2004 represents the cumulative costs reported based on 46%of the capacity of the landfill having been used to date. This amount has been accrued in thegovernment-wide financial statements within the governmental activities and has been reported as a

105

designation of fund balance in the General Fund. The estimated total current cost of post-closure careremaining to be recognized is $2,984,542. Actual costs may be higher due to inflation, changes intechnology, or changes in regulation.

The City is the perm it holder for the landfill, and Louisiana Solid Waste Rules and Regulations requirealt permit holders to demonstrate financial responsibility by one of a group of financial tests containedwithin the regulations. The City has demonstrated its financial responsibility by the fact that the tangiblenet worth of the City is at least $ 10 million, Hie net worth is at least six times the estimate of the closureand post-closure costs, and at least 90% of the assets are located in the United States.

F. Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets;errors and omissions and natural disasters. All self-insurance programs are accounted for within InternalService Funds. The City has included incurred but not reported claims in determining its claims liabilityin both self-insurance programs.

The Retained Risk Fund is used to account for self-insurance activities involving property damage,workers' compensation and general liability claims. The City is retaining the risk for its automobile andgeneral liability exposures, except for exposures related to Fire Department vehicles. Liability policiesare maintained with third-party insurance carriers for the City's fire vehicles, the drivers, and attendants.The Municipal and Regional Airports are insured with a third-party carrier with liability limits to $200million combined single limit. The liability for workers' compensation was insured with a third-partyinsurance carrier with statutory limits in excess of the City's self-insured retention. The City retains$500,000 of liability per occurrence for Louisiana Workers* Compensation benefits, and for U.S.Longsshoremen and Harbors Workers Act, Jones Act, and other Maritime Act benefits per occurrenceon its excess workers' compensation policy. The City retains $ 1,200,000 per occurrence of loss pursuantto the provisions of a Commercial General Liability Policy which also provides coverage for LawEnforcement Liability, including the operation of the City jail. Property insurance was maintained witha third-party carrier subject to a $50,000 per occurrence of loss deductible. Property coverage was alsomaintained with third-party carriers on heavy equipment and boilers and machinery.

There were no reductions in insurance coverage from coverage in the prior year. No property damageclaim has exceeded the City's insurance coverage during the past three fiscal years.

Payments to the Retained Risk Fund are accounted for as revenues by the receiving fund andexpenditures/expenses by the paying funds. Payments into the fund are available to pay claims andadministrative costs of the program. Payments in excess of actual expenses are recorded as transfers.At December 31,2004, the total net assets of $5,666,165 were designated for future catastrophic losses.

Claim liabilities are calculated considering the effects of inflation, recent claim settlement trendsincluding frequency and amount of pay-outs and other economic and social factors, including the effectsof specific, incremental claim adjustment expenses, salvage and subrogation. No other allocated orunallocated claim adjustment expenses are included. The claims liability of $7,535,296 reported in thefund at December 31,2004 is based on the requirements of Governmental Accounting Standards BoardStatement No. 10, which requires that a liability for claims be reported if information prior to theissuance of the financial statements indicates that it is probable that a liability has been incurred at thedate of the financial statements and the amount of the loss can be reasonably estimated. Changes in thefund's claims liability amount in fiscal years 2003 and 2004 were:

106

Retained Risk Fund

20032004

Beginning ofFiscal Year

Liability

$6,713,3397,538,744

Current YearClaims andChanges in

Estimates

$ 6,633,1609,302,144

ClaimPayments

$ 5,807,7559,305,592

Balance atFiscal

Year-end

$7,538,7447,535,296

The City also maintains a self-insurance program to cover medical and dental care claims of Cityemployees, retirees, and dependents. This program is accounted for in the Employees Health Care Fund,an Internal Service Fund.

Changes in the fund's claims liability amount in fiscal years 2003 and 2004 were:

Employees Health Care Fund

20032004

ComDensation

Beginning ofFiscal Year

Liability

$4,001,1894,438,735

Current YearClaims andChanges in

Estimates

$16,791,21516,467,982

ClaimPayments

$16,353,66917,352,247

Balance atFiscal

Year-end

$4,438,7353,554,470

Paid to Council Members

Council Member

Calvin B. Lester, Jr., District A

Richard M. Walford, District B

Thomas G. Carmody, Jr., District C

Michael Gibson, District D

Jeffery A. Hogan, District E

James E. Green, District F

Theron J. Jackson, District G

107

H. Subsequent Events

In February 2005, the City issued $58,065,000 of General Obligation Refunding Bonds, Series 2005A.The bonds were issued to refund certain maturities of the General Obligation Bonds, Series I999Aoriginally issued for $87,000,000. The amount refunded was $56,775,000.

In April 2005, the City entered into a Loan Agreement for $40,000,000 with the Louisiana LocalGovernment Environmental Facilities and Community Development Authority for the purpose offinancing a portion of the cost of acquiring, owning, constructing, and equipping the Convention CenterHotel.

108

CITY OF SHREVEPORT, LOUISIANANOTES TO REQUIRED SUPPLEMENTARY INFORMATION

FOR THE YEAR ENDED DECEMBER 31, 2004(UNAUDITED)

The information presented in the required supplementary schedules was determined as part of the actuarialvaluations at the dates indicated. Additional information as of the latest actuarial valuation follows:

Valuation date

Actuarial cost method

Amortization method

Remaining amortizationperiod

Asset valuation method

Actuarial assumptions:Investment rate of

return

Projected salaryincreases

Includes inflation at

Cost-of-livingadjustments

FPRF

12/31/04

Projected unit credit

Level dollar

1 1 years closed

Market value

8%

5%

3.5%

3.5%

PPRF

12/31/04

Projected unit credit

Level dollar

1 1 years closed

Market value

8%

5%

3.5%

3.5%

ERS

12/31/04

Entry age normal cost

Level dollar

30 years open

Market value

8.5%

3% + age-related merit andseniority increases

3.5%

1.8%(all but vested terminations)

109

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112

Nonmajor Governmental FundsSpecial Revenue Funds

Special revenue funds are used for specific revenues that are legally restricted to expenditures forparticular purposes.

Enrichment Fund - This fund is used to account for donations held for the purpose of enrichment andimprovement of City facilities and services.

Riverfront Development Fund - This fund accounts for the collection and disbursement of funds fromthe riverfront gaming activities.

Police Grants Fund - This fund accounts for the collection and disbursement of various state andfederal grants to the Cily of Shreveport Police Department.

Downtown Entertainment Economic Development Fund - This fund is used to account forincremental sales tax revenues collected from the development area to promote development of the areaand associated projects.

Redevelopment Fund - This fund is used to acquire and land bank vacant adjudicated property forfuture redevelopment projects and to acquire other property for current redevelopment projects inredevelopment areas.

Environmental Grants Fund - This fund accounts for grants received for Brownfields assessment,cleanup loan fund, job training, and economic development.

Capital Projects Funds

Capital projects funds are used to account for the acquisition and construction of major capital facilitiesother than those financed by proprietary funds.

Miscellaneous General Obligation Bond Funds - These funds are used to account for bonds issuedfor the purpose of constructing and/or improving streets, public safety, drainage systems, waste disposal,parks, an industrial park, and a Sportran maintenance facility.

Miscellaneous Capital Projects Fund - This fund is used to account for various projects funded bymiscellaneous sources other than general obligation bonds.

1999 General Obligation Bond Fund - This fund is used to account for bonds issued for the purposeof constructing and/or improving public safety, parks and recreation, streets, the Riverfront, anddrainage systems.

2001A General Obligation Bond Fund - This fund is used to account for bonds issued for the purposeof constructing and/or improving public safety, parks and recreation, streets, and drainage systems.

2003A General Obligation Bond Fund - This fund is used to account for bonds issued for the purposeof constructing, acquiring, and improving works of neighborhood public improvement, recreationfacilities, and police and fire facilities.

113

CITY OF SHREVEPORT, LOUISIANACOMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDSDECEMBER 31,2004

ASSETSCash and cash equivalents

RiverfrontEnrichment Development

Accounts receivable, netDue from other governmentsDue from other fundsAssets held for resale

Total assets S

LIABILITIES AND FUNDBALANCES

Liabilities:Accounts payable SDue to other fundsDel cried revenue

Total liabilities

Fund balance:Reserved for-.

FnciimhranccsAssel> held lor icsalc

Unreserved:Designated lor subsequent

year's expendituresUnreserved, undesignatedTola) fund balance

Total liabilities and fund balance S

The accompanying notes are an integral

538.777 $ 3,283,938 $547,224 2.U6.388

978,775

886,001 $ 6,379,101

35,763 $ 25,361 $4,571,025

35.763

44.210

4,596,386

93.052

806,028 1,689,663

850,238 1,782,715

.886,001 $ 6,379 JO 1 S

part of the financial statements.

Special Revenue FundsDiiwntnwn

EntertainmentCo I Ice Economic

Grants Development Redevelop men I

9,110 $5,871

299,701

299,701 $

18,476 $249,027

267,503

14,981 S75,33575,335 S

4.449

4.449

EnvironmentalGrants

203,151 S130.924

85.425

419,500 $

17,349 $

17,349

Total

4.034.9762,600.407

978.775385.126

75.3358,074,619

96,9494,824.501

4,921.450

107,573

-

(75,375)32,198

299,70_1 S

..

--

14,981-14,981

14,981 J

-75..115

(4,449)70.886

75,335 $

44.882

357.269--402.151

419.500 S

289.71775.315

2.867.941(79.824)

3,153,169

8,074.619

114

Capital Project FundsMiscellaneous

GeneralObligationBoad Funds

1,485,5002.246,288

16,847

442,092---

6,190,727

704. 1 73

876.40515,423

1.596,001

1.720,064"~

2.874,662-

4.594.726

-.-. I'Jt0??-27

MiscellaneousCapitalProjects

Fund

$1.217,908--680,486

2,076,990-

$ 3.975,384

S 498,984634,283..

1,133,267

978.641

--

1.863,476-

2.842.Vi7

$ 3,975,384

1999

GeneralObligationBond Fund

S 5,527,3743,562,325---

11,047,889--

$ 20,137,588

$ 27,946---27,946

814,434

—

19,295.208-

~ 20,109,642

S .._2<M37,588

2001 AGeneral

ObligationBond Fund

$ 2,124.17210,086.860

48,667-----

$ 12.259,699

$ 1,288.708-

--

1,288,708

4.954,766

—

6,016,225--

iO.976.99i

$ 12,259.699

20 03 AGeneral

ObligationBond Fund

$ 20.987,312 S13.525.616

65,508-----

$ 34,578,436 $

$ -- S315,564-

315,564

••

34,262.872~

34,262,872

$ 34,578,436_ $

Total

32,124,35830,638,997

131.0221,122.578

13,124,879-

77.141,834

2.519.8H1,826,252

15,4234,361,486

8,467,905

••

64.312,443-

72,780.348

77,141,834

TotalISonmajor

GovernmentalFunds

S 36,159,33433.239,404

1,109,7971,507.704

13.124.87975,335

S 85.216,453

$ 2.616,7606,650,753

15,4239.282,936

8,757,62275.335

67,180,384(79.824)

75;933.5n

S 85,216,453

115

Enrichment

REVENUESIntergovernmental $GamingInvestment earnings 10,442Miscellaneous 334,337

Tolal revenues 344,779

KXPKN PITI tRKS

CiiriL-iH.(Jcnerat governmentVuWit safely 5 J 1,021Culture and recreation 49,726Kconomic developmeni

Capital outlayBond issuance costs

"I'oial expenditures 580,747l-xccss (deficiency) of revenues

over (under) expenditures (235.968)

OTHER FINANCING SOURCES (USES)Transfers inTransfers ouiRefunding bonds issuedCertificate of indebtedness issuedDiscount on certificate ofindebtcdness

issuedLoan pi DC ceils

I oial other I mane ing sources and useNet change in fund balances

fund balances-beginningFund balances-ending S

CITY OF SHREVEPORT. LOUISIANACOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

IMON MAJOR GOVERNMENTAL FUNDSFOR THE YEAR ENDED DECEMBER 31,2004

SpecUI Revenue FundsDown (own

EntertainmentEconomic

Development RedevelopmentRiverfront

Development

12,891,54977,897

892.75213,862,198

PoliceGrants

EnvironmentalGrants

S 1.072,945 $

3,3313,853

1,080.129

1,698,945

4.197,447

4,197,447 1.698,945

9.664,751 (618.816)

32,845(12,865,753)

(235,968)1,086,206

850,238 $

(12,865,753) 32,845(3,201,002) (585,971)4,983,717 618,169

^ 1,782,715 S ,... 32,198 $

960132.592133,552

5939.72610,319

133.552

(200,000)

(200,000)(66.448)81,429

14,981 $

9.681

9,681

638

63870,24870,886 S

Total

537,491 S 1,6)0,43612.891.549

2.149 95.3721.373.260

539,640 15.970,617

2,229.96649.726

137.489 4.344,617

137,489 6,624.309

402.151 9,346.308

32,845(13,065.753)

(13,032.908)402,151 (3,686.600)

6,839,769402.151 $ 3,153,169

The accompanying notes arc an inicgra! pan of the financial statements.

116

MiscellaneousGeneral

ObligationBond funds

3.687.307

74.3865437.4

3,816,017

9.308.745

9.308,745

(5.492.728)

4,447.078(1.798.316)

49.557

2.698J19(2.794.409)7.389.135^594^26

Mucctlanrou*CapitalProjectsFund

S 630.635

34,0217

664,6b3

7,988,836123.193

8,112.029

(7.447,366)

1,728.845(4.339)

5.375,000

(53.910)1,295.025

" 8,340,621893.255

1,948,862J 2.842.117

1999General

ObligationBond Fund

$ 52.226

217,115

269.341

1,321,395

1.321,395

(1.052.054)

1,675.643(3,473.690)

(1,798,047)(2,850.101)22,959.743

S 20,109,642

Capital Project Funds2001 A

GeneralObligationBond Fund

$ -- S

196,85810.000

206.858

11,848.546

11.848,546

(11,641,688)

4,269,364(1,117,580)

3~,15I,784(8.489.904)19.460,895

S 10^970,99 1 S

2003 AGeneral

ObligationBond Fund

847,916

847,916

1.320.541

7507.775

1.329.066

(481.150)

(3,781,971)

(3,781,971)(4.263.121)38,525,99334,262,872

Total

$ 4.370,168 $

1.370.29664.331

5,804,795

1.320,541

30.468.272130,968

31.919.781

(26,114.986)

12.120.930(10,175.896)

49,5575,375.000

(53.910)1.295.0258.610,706

(17,504,280)90,284.628

S 72,780,348 $

TotalNnn major

GovernmentalFunds

5,980.60412.891.5491.465.6681.437.591

21,775.412

1.320.541

49.7264,344.017

30,468.272130.968

38.544,090

(16.768.678)

12.153.775(23,241,649)

49,5575,375.000

(53,910)1,295,025

(4,422.202)(21,190,880)97,124.39775,933,517

117

CITY OF SHRCVEPORT, LOUISIANA

RIVERFRONT DEVELOPMENT

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL ON BUDGETARY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2004

REVENUES

Investment earnings $

GamingMiscellaneous

Total revenues

EXPENDITURES

Current:

Economic development:

Salaries, wages and employee benefits

Materials and supplies

Contractual services

Other charges

Total expenditures

Excess of revenues over expenditures

OTHER FINANCING USES

Transfers out

Total other financing uses

Nel change in fund balance

Fund balances -beginning

Fund balances-ending $

Net change in fund balance

{Budget basis)

Adjustments:

Encumbrances

Net change in fund balance

(GAAP basis)

The accompanying notes arc an integral part of the financial statements.

Budgeted Amounts

Original

160,000

14,550,000

855,00015,565,000

Final

$ 160,000

13,750,000

855,000

14,765,000

Actual

Amounts

Budgetary

Basis

$ 77,897

12,891,549

892,752

13,862,198

Variance With

Final Budget

Positive

(Negative)

S (82,103)

(858,451)

37,752(902,802)

273,900

2,800

842,427

2,880,755

3,999,882

11,565,118

(12,949,000)

(12,949,000)

(1,383,882)

4,983,717

3,599.835 S

273,900

2,800

1,102,427

3,080,755

4,459,882

10,305,118

(12,999,0(10)

(12,999,000)

(2,693,882)

4,983,717

2,289,835

261,358

2,028

957,462

3,069,65 1

4,290,499

9,571,699

(12,&65,753)

(12,865,753)

(3,294,054)

4,983,717

$ 1,689,663 S

12,542

772

144,965

11,104

169,383

(733,419)

133,247

133,247

(600,172)

-

(600,172)

$ (3,294,054)

93,052

$ (3,201,002)

118

Nonmajor Enterprise Funds

Enterprise funds are used to account for the acquisition, operation, and maintenance of facilities andservices which are entirely or predominantly self-supported by user charges. The operations ofenterprise funds arc accounted for in such a manner as to show a profit or loss similar to comparableprivate enterprises.

Shreveport Area Transit System - This fund accounts for the activities necessary to provide busservice for the residents of the City.

Golf - This fund is used to account for the operations of the City's three golf courses. The fund'soperations are financed by greens fees, golf equipment rentals, merchandise sales, memberships, andconcession sales to the public.

Downtown Parking Fund - This fund is used to account for parking revenues to promote improvedparking facilities in the downtown area.

119

CITY OF SHREVEPORT, LOUISIANA

COMBINING STATEMENT OF NET ASSETS

NONMAJOR ENTERPRISE FUNDSDECEMBER 31, 2004

ASSETS

Current Assets;

Cash and cash equivalentsIn vestments

Receivables, net

Due from other funds

Due from other governmentsInventories

Prepaid items

Total current assetsNoncurrcnt Assets:

Capital Assets:Land

Buildings

Improvements other than buildingsEquipment

Less accumulated depreciationTotal noncurrcnt assets

Total assets

LIABILITIES

Current Liabilities:

Accounts payable

Accrued liabilities

Due to component unitDeferred revenue

Compensated absences

Total current liabilities

Noncurrcnl Liabilities:Compensated absences

Total noncurrent liabilities

Total liabilities

NET ASSETSInvested in capita) assets, net of related debt

Unrestricted

Total Net Assets

Shreveport

Area Transit

System

279,268179,979134,247660,766

331,667

304,253165,675

2,055,855

1,940,4088,291,010

13,260.818

(10,259,933)

13,232,303

15,288,158

115,568

631,218

195,664

942,450

942,450

13,232,303

1,113,40514,345,708 S

Downtown

Golf Parking

97,904 S 582,854

63,096 375,629407

..

..

15,970..

177,377 958,483

268,840

868,530393,175

(633,171)897,374

1.074,751 958,483

9,697

13,663

34,000

41,396

16,673

81,429 34,000

42,98442,984

124,413 34,000

897,374

52,964 924,483

950,338 S _?24.483

Total

Nonmajor

Enterprise

Funds

$ 960,026618,704134,654

660,766

331,667

320,223

165,675

3,191,715

1,940,408

8,559,850

868,53013,653,993

(10,893,104)14,129,677

17,321,392

125,265

644,881

34,000

41,396212,337

1,057,879

42,98442,984

1,100,863

14,129.677

2,090,852

S 16,220,529

The accompanying notes are an integral part of the financial statements.

120

CITY OFSIIREVEPORT, LOUISIANACOMBINING STATEMENT OF REVENUES, EXPENSES,

AND CHANGES IN FUND NET ASSETSNONMAJOR ENTERPRISE FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2004

ShreveportArea Transit

System GolfDowntown

Parking

TotalN on majorEnterprise

Funds

OPERATING REVENUESCharges for services $ 1,937,453Miscellaneous 31,109

Total operating revenues ...... ''?A?'?62

OPERATING EXPENSESPersonal services 5,424,773Contractual services and other expenses 1 ,734,86 1Utilities 98,798Repairs and maintenance 30,257Materials and supplies 1,437,067Depreciation 1,001,670

Total operating expenses 9,727,426

Operating income (loss)

NONOPERATIIMC REVENUES(EXPENSES)

Investment earningsIntergovernmental 2,530,859Loss on disposal of capital assets (1,395)

Total nonopcrating revenues (expenses) 2,529,464Income (loss) before contributions

and transfers (5,229,400)Capital contributions 356,151Transfers in 4,251,779

Change in net assets (621,470)Total net assets-beginning 1 4,967, 1 78Total net assets-ending $ __Hi3"45,708

973,04816,241

989,289

794,358231,22872,2026,455

165,08065,287

1,334,610

(345,321)

728

728

(344,593)319,862336,600311,869638,469950,338

598,239

598,239

433,000

433,000

165.239

3.508,74047,350

3,556,090

6,219,1312,399,089

171,00036,712

1,602,1471,066,957

11,495,036

(7,938,946)

8,730.--

8,730

173,969----1 73,969750,514924,483 S

9,4582,530.859

(1,395)2,538,922

(5,400,024)676,013

4,588,379(135,632)

16,356,16116,220,529

The accompanying notes are an integral part of the financial statements.

121

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Internal Service Funds

Internal service funds are used to account for the financing of goods and services provided by onedepartment or agency to other departments or agencies of the City, and to other government, on a costreimbursement basis.

Employees Health Care Fund - This fund is used to account for medical and dental care claims by theemployees.

Retained Risk Fund - This fund is used to account for self-insurance activities involving propertydamage, worker's compensation and general liability claims.

Fleet Services Fund - This fund is used to account for maintenance of the City's fleet with theexception of Fire, Sportran, and Airport.

125

CITY OF SHREVEPORT, LOUISIANACOMBINING STATEMENT OF NET ASSETS

INTERNAL SERVICE FUNDSDECEMBER 31,2004

EmployeesHealth Care

ASSETSCurrent Assets:

Cash and cash equivalentsInvestmentsReceivables, netDue from other fundsInventoriesPrepaid items

Total current assetsNoncurrent Assets:

Capital Assets:LandBuildingsEquipmentLess accumulated depreciation

Total noncurrent assetsTotal assets

LIABILITIESCurrent Liabilities:

Accounts payableDue to other fundsCompensated absencesClaims and judgments

Total current liabilitiesNoncurrent Liabilities:

Compensated absencesTotal noncurrent liabilities

Total liabilities

NET ASSETSInvested in capital assets, net of related debtUnrestricted (deficit)

Total net assets

The accompanying notes are an integral part of the financial statements.

RetainedRisk

FleetServices

TotalInternal Service

Funds

$ 6,596,141

—1,786,378

—«

—8,382,519

_

———8,382,519

$ 7,548,4294,864,709

--5,823,067

••751,057

18,987,262

—15,044(11,793)3,251

18,990,513

S

..--260,720--260,720

62,000913,088586,465(994,185)567,368828,088

$ 14,144,5704,864,7091,786,3785,823,067

260,720751,057

27,630,501

62,000913,088601,509

(1,005,978)570,619

28,201,120

—1,776,276

—3,554,4705,330,746

—5,330,746

3,051,7733.051,773

99,4995,680,099

2,1567,535,296

13,317,050

7,2987,298

13,324,348

3,2515,662,914

$ _ 5.666.165

17,233329,884

12,762«359,879

61,75561,755

421,634

567,368(160,914)

$ 406,454

116,7327,786,259

14,91811,089,76619,007,675

69,05369,053

19,076,728

570,6198,553,773

$ 9,124^392

126

CITY OF SHREVEPORT, LOUISIANACOMBINING STATEMENT OF REVENUES, EXPENSES,

AND CHANGES IN FUND NET ASSETSINTERNAL SERVICE FUNDS

FOR THE YEAR ENDED DECEMBER 31,2004

OPERATING REVENUESCharges for servicesMiscellaneous

Total operating revenues

OPERATING EXPENSESPersonal servicesContractual services and other expensesUtilitiesRepairs and maintenanceMaterials and suppliesClaimsDepreciation

Total operating expenses

Operating income (loss)

NONOPERAT1NG REVENUES(EXPENSES)

Investment earningsInterest expense

Total nonoperating revenues (expenses)Income (loss) before transfers

Transfers outChange in net assets

Total net assets-beginningTotal net assets-ending

The accompanying notes are an integral part of the financial statements.

EmployeesHealth Care

18,942,411140,161

19,082,572

57,5221,690,370

4,36516,467,982

_18,2_2_q,239

862,333

RetainedRisk

$ 11,459,013522,621

11,981,634

220,6721,927,093

4,4729,302,144

85

11,454,466

527,168

TotalFleet Internal Service

Services Funds

$ 3,329,117 $15,204

3,344,321

1,317,901165,81043,409

854,935937,120

66,333

3,385,508

(41,187)

33,730,541677,986

34,408,527

1,596,0953,783,273

43,409854,935945,957

25,770,12666,418

33,060,213

1,348,314

27,807

27,807890,140

890,1402,161,6333.051,773

143,128

143,128670,296

(5,680,099)(5,009,803)10,675,968

$ 5,666,165

(2,384)(2,384)(43,571)

(43,571)450,025

$ 406.454 $

170,935(2,384)168,551

1,516,865(5,680,099)(4,163,234)13,287,6269,124,392

127

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Fiduciary FundsPension Trust Funds

Firemen's Pension and Relief Fund - This fund is used to account for a single-employer definedbenefit pension plan that temporarily covers firefighters who retire after January 1,1983 and meet theeligibility requirements of the local retirement plans but not the state plan.

Policemen's Pension and Relief Fund - This fund is used to account for a single-employer definedbenefit pension plan that temporarily covers policemen who retire after January 1,1983 and meet theeligibility requirements of the local retirement plans but not the state plan.

Employees* Retirement System - This fund is used to account for a cost-sharing multiple-employerdefined benefit pension plan that covers all full-time classified employees of the City and other boardrecommended organizations other than policemen and firemen. Appointed officials also have the optionto join the plan.

131

CITY OF SHREVEPORT, LOUISIANACOMBINING STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2004

ASSETS

Cash and cash equivalents

Receivables:

Interest receivable

Accounts receivable

Due from other funds

Prepaid items

Investments, at fair value:

U.S. government securitiesMutual funds

Domestic corporate bondsDomestic common stock

Total investments

Other assets:

Cash surrender value of life

insurance policies

Total assets

LIABILITIESAccrued liabilities

Due to other fundsEmployees' deposits held in escrow

Total liabilities

Firemen's

Pension and

Relief

Policemen's

Pension and

Relief

Employees'

Retirement

System

Totil

Employee

Retirement

Funds

40,589

204,756322,016

1,566,656

3,000,527

1,500,669

6,067,852

4,267.070

10,902,283

253,639

253,639

142,100

19,866

18,705

151,561

282,786

760,923

2,463,360

735,290

3,959,573~

3,891,202

8,465,793

NET ASSETS

Held in trust for pension benefits 5 10.648,644 $ 8,465,793

The accompanying notes are an integral part of the financial statements.

$11,142,447

542,3055,072

16,777,883

53,075,412

103.072,938

172,926,233

184,616,057

67,764

2,818,4501.716,494

4,602,708

180,013.349

11,284,547

602,76023,777

356,317

604,802

19,105,462

5,463,887

55,311,371

103.072.938

182,953,658

8,158,272

203,984,133

67,764

3,072,0891,716,494

4,856,347

199.127.786

132

CITY OF SHREVEPORT, LOUISIANA.

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2004

ADDITIONS

Contributions:

Employer

Plan members

Total contributions

Investment earnings:

Net appreciation in fair value

of investments

Interest

Dividends

Total investment income

Less investment expense

Net investment income

Miscellaneous

Total additions

DEDUCTIONS

Pensions

Refund of member contributionAdministrative expensesLife insurance

Total deductions

Change in net assets

Net assets - beginning

Net assets - ending

The accompanying notes are an integral part of the financial statements.

Firemen's

Pension and

Relief

1,228,535

1,228,535

197,987

615190,924

389,526

11,017

376,499

210,000

1,815,034

957,315

18,418237,463

1,213,196

601,838

10,046,806

10,648,644

Policemen's

Pension and

Relief

J 1,235,533

1,235,533

151,412

5,048

117,815

274,275

13,020

261,255

220,000

1,716,788

779,550

18,616136,967

935,133

781,655

7,684,138

$ 8,465,793

Employees'

Retirement

System

S 3,613,963

2,000,458

5,614,421

10,056,173

3,396,4191,798,176

15,250,768

1,055,156

14,195,612

6,106

19,816,139

11,498,525

876,705178,245

12,553,475

7,262,664

1 72,750,685

$ 180,013,349

Total

EmployeeRetirement

Funds

$ 6,078,03 1

2,000,458

8,078,489

10,405,572

3,402,082

2,106,915

15,914,569

1,081,203

14,833,366

436,106

23,347,961

13,235,390

876,705215,279374,430

14,701,804

8,646,157

190,481,629

$ 199,127,786

133

134

Discretely Presented Component Unit

This special revenue fund accounts for receipts and disbursements which occur in conjunction withcoordinating City planning, preparing and enforcing zoning laws, and keeping City annexation policiescurrent.

135

CITY OF SHREVEPORT, LOUISIANAMETROPOLITAN PLANNING COMMISSION

BALANCE SHEETDECEMBER 31,2004

ASSETSCash and cash equivalents $ 52,893Due from other governments __ 38,750

Total assets $"

LIABILITIES AND FUND BALANCESLiabilities:

Accounts payable $ 1,423Due to primary government 38,750Due to other governments ____ 5^1,470

Total liabilities 91,643

Fund balance:Reserved for encumbrances 602Unreserved, undesignated ________ (602)

Total fund balance —

Amounts reported for the Metropolitan Planning Commission in the Statement of Net Assetsfor component units are different because:

Capital assets reported in governmental activities are not financial assets and, therefore,are not reported in governmental funds. _ 936,350

Net assets $ 936.350

The accompanying notes are an integral part of the financial statements.

136

CITY OF SHREVEPORT, LOUISIANAMETROPOLITAN PLANNING COMMISSION

STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE

FOR THE YEAR ENDED DECEMBER 31,2004

REVENUESIntergovernmentalMiscellaneous

Total revenues

EXPENDITURESGeneral government

Total expenditures

Deficiency of revenues under expenditures

OTHER FINANCING SOURCESPayment from City of Shreveport

Net change in fund balance

Fund balance - beginning

Fund balance - ending

Amounts reported for the Metropolitan Planning Commission in the Statement of Activitiesfor component units are different because:

Governmental funds report capital outlays as expenditures. However, in the Statementof Activities, the cost of those assets is allocated over their estimated useful lives andreported as depreciation expense.

Depreciation expense

Change in net assets

The accompanying notes are an integral part of the financial statements.

$ 155,000142,396297,396

U22.614

U72.6I4

(825,218)

825,218

(55,755)

137

138

Statistical Section

This section, which is composed of accounting and non-accounting data, is presented in order to providethe reader with additional information as an aid to understanding the financial activities of the City.Many of these tables present data from outside the accounting records; therefore, the Statistical Sectiondata has not been subjected to independent audit.

139

CITY OF SHREVEPORT, LOUISIANAGENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1)

FISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31, 2004

FiscalYear

Ended

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

GeneralGovernment

$30,888,942

26,545,711

26,236,171

29,394,166

29,851,439

31,160,204 (2)

26,846,543

24,673,122

27,464,094

31,751,505

PublicSafety

$51,541,031

55,035,600

59,057,314

57,472,321

62,695,370

60,899,205

63,779,843

68,731,189

72,337,147

82,694,307

PublicWorks

$25,988,243

25,579,678

25,059,130

24,683,745

24,008,583

27,090,411 (3)

27,155,205

28,580,522

25,992,785

33,005,430

Health andWelfare

$359,734

419,927

191,991

390,998

411,809

674,884

493,450

483,659

359,725

293,575

Cultural andRecreation

$10,029,829

10,472,199

9,545,451

9,968,862

10,785,474

10,606,983

11,475,437

11,350,929

10,780,702

11,096,644

(1) Includes general, special revenue, and debt service funds.(2) Beginning in 2000, general government expenditures for component units are reported as payments

to component units and included within total expenditures rather than transfers.(3) Beginning in 2000, Highways and Streets and Sanitation were combined for reporting as Public Works.(4) Beginning in 2000, these expenditures are recorded as transfers to the appropriate capital

project funds where the expenditures are incurred.

Unaudited - see accompanying independent auditor's report.

140

CommunityDevelopmentand Housing

$3,598,589

2,226,544

3,285,455

4,483,770

5,549,549

5,460,123

8,883,571

3,851,432

5,141,498

4,814,883

EconomicDevelopment

$2,267,197

1,488,155

1,744,973

3,831,019

4,616,895

3,328,001

3,558,794

4,703,913

4,770,448

5,073,823

EconomicOpportunity

$3,366,535

3,131,617

3,269,045

3,361,290

3,773,472

2,220,321

2,749,050

3,481,716

2,940,163

4,596,238

CapitalOutlay

$2,295,908

3,149,422

353,402

361,857

1,907,644

(4)

--

~

~

_.

DebtService

$21,350,303

20,403,603

25,752,678

85,487,894

29,892,194

39,513,016

43,115,634

42,912,202

44,440,597

44,975,080

Total

$151,686,311

148,452,456

154,495,610

219,435,922

173,492,429

180,953,148

188,057,527

188,768,684

194,227,159

218,301,485

141

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142

CITY OF SHREVEPORT, LOUISIANAGENERAL FUND EXPENDITURES BY FUNCTION

FISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31, 2004

FiscalYear

Ended

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

GeneralGovernment

$27,319,896

24,014,575

23,758,250

26,966,957

27,166,380

29,514,391 (1)

24,663,594

22,754,069

25,407,052

29,464,878

PublicSafety

$53,197,365

53,172,987

56,553,595

53,632,769

60,206,574

59,596,830

61,812,341

67,196,188

70,238,220

80,464,341

PublicWorks

$25,988,243

25,579,678

25,059,130

24,683,745

24,008,583

27,090,411 (2)

27,155,205

28,580,522

25,992,785

33,005,430

Cultural andRecreation

$9,816,436

10,366,928

9,503,975

9,727,748

10,633,296

10,470,289

11,026,051

11,242,651

10,707,704

11,020,022

Total

$116,321,940

113,134,168

1 14,874,950

115,011,219

122,014,833

126,671,921

124,657,191

129,773,430

132,345,761

153,954,671

(1) Beginning in 2000, general government expenditures for component units are reported as paymentsto component units and included within total expenditures rather than transfers.

(2) Beginning in 2000, Highways and Streets and Sanitation were combined for reporting as Public Works.

Unaudited - see accompanying independent auditor's report.

143

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144

CITY OF SHREVEPORT, LOUISIANAGENERAL FUND TAX REVENUES BY SOURCE

FISCAL YEARS ENDED DECEMBER 31,1995 THROUGH DECEMBER 31, 2004

FiscalYear

Ended

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

PropertyTaxes

$16,470,366

16,604,762

17,230,847

17,828,743

17,832,604

18,195,958

19,572,536

19,305,868

20,315,853

20,537,534

SalesTaxes

$62,230,417

65,023,983

63,815,812

67,778,596

71,113,334

75,548,503

75,481,654

75,971,486

82,343,007 (1)

87,911,418

FranchiseTaxes

$5,214,852

5,460,427

5,860,234

5,868,658

5,854,875

6,570,678

7,086,954

6,351,685

6,858,781

6,924,341

Total

$83,915,635

87,089,172

86,906,893

91,475,997

94,800,813

100,315,139

102,141,144

101,629,039

109,517,641

115,373,293

(1) In 2003 there was a .25% sales tax rate increase.

Unaudited-see accompanying independent auditor's report.

145

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146

CITY OF SHREVEPORT, LOUISIANAASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

FISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31,2004

RatioEstimated Assessed Value

Fiscal Assessed Actual to Estimated_Year_ ^ Value Value Actual Value

1995 $763,224,730 $6,430,617,133 11.9

1996 792,161,740 6,659,115,987 11.9

1997 832,135,880 6,943,578,693 12.0

1998 854,888,230 7,126,400,840 12.0

1999 855,952,380 7,143,817,833 12.0

2000 898,928,580 7,527,501,313 11.9

2001 937,275,970 7,888,214,320 It .9

2002 946,647,780 8,137,515,920 11.8

2003 964,939,480 8,253,848,820 11.7

2004 1,105,690,930 (1) 9,637,710,013 11.5

Note:

Assessed values are established by the Caddo Parish Tax Assessor on January 1 of each year at approximately10-25% of assumed market value. A revaluation of all property is required to be completed no less than every4 years. The last revaluation was completed for the roll of January 1, 2004, The next revaluation will becompleted as of January 1, 2008 for the 2008 tax roll.

(1} Included in the total assessed value of property within the City is $8,808,680 of assessed value which hasbeen adjudicated to Caddo Pariah.

Unaudited - see accompanying independent auditor's report.

147

CITY OF SHREVEPORT, LOUISIANASUMMARY OF AD VALOREM TAX MILLAGE RATES

(TAX RATE PER $1,000 ASSESSED VALUE)FISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31,2004

Debt Service (1)

General Alimony (2)

Police Three-PlatoonSystem (2)

Police and Fire Uniforms& Equipment (3)

Salary & Wage Schedule (3) 1.19

Streel Improvements (3)

Employee Benefits (3)

2004

$27.82

10.99

1.57

1.19

1.19

1.19

1.80

2003

$30.54

12.13

1.73

1.31

1.31

1.31

1.99

2002

$30.54

12.13

1.73

1.31

1.31

1.31

1.99

2001

$30.54

12.13

1.73

1.31

1.31

1.31

1.99

2000

$30.54

12.13

1.73

1.31

1.31

1.31

1.99

1999

$30.54

12.32

1.76

1.33

1.33

1.33

2.02

1998

$30.54

12.32

1.76

1.33

1.33

1.33

2.02

1997

$30.54

12.32

1.76

1.33

1.33

1.33

2.02

1996

$30.54

12.32

1.76

1.33

1.33

1.33

2.02

1995

$29.67

12.65

1.81

1.37

1.37

1.37

2.07

Parks & RecreationalFacilities (3)

Total

.89 .98 .98 .98 .98 1.00 1.00 1.00 1.00 1.03

$46.64 $51.30 $51.30 $51.30 $51.30 $51.63 $51.63 $51.63 J5J.63_ $51.34

(1) Political subdivisions in Louisiana are required to levy taxes without limitation at such rates asmay be necessary to service general obligation bonds.

(2) City Council is authorized by Louisiana Constitution to levy, after public hearing by a two-thirds affirmative vote, a millage rate of up to, but not in excess of:

(a)12.65 mills for General Alimony(b)1.8l mills for Police Three-Platoon System

(3) Special millage approved by referendum and must be reapproved by referendum every 5 years.(Last submitted and approved on April 5,2003).

Unaudited - see accompanying independent auditor's report.

148

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149

CITY OF SHREVEPORT, LOUISIANAPRINCIPAL TAXPAYERS

DECEMBER 31,2004

Name

1. AEP Southwestern Electric Power Company

2. BellSouth

3. Harrah's

4. Hibemia National Bank

5. AMSouthBank

6. Bank One

7. Wal-Mart

8. Calumet Lubricants

9. Centerpoint Energy Arkla

10. Libbey Glass

Total amount for ten principal taxpayers

Total for remaining taxpayers

Total amount for all taxpayers

Unaudited - see accompanying independent auditor's report.

Percentage ofAssessed Value to

Assessed Value

$41,006,680

23,667,250

20,974,930

13,718,760

11,384,470

9,348,060

8,652,320

5,586,170

5,516,990

5,281,550

145,137,180

960,553,750

$1,105,690,930

Tax Amount

$2,103,643

1,214,130

1,076,014

703,772

584,023

479,555

443,864

286,571

283,022

270,944

7,445,538

44,123,892

$51,569,430

Total Assessment

3.7%

2.5

2.2

1.4

1.2

.8

.5

.6

.6

.5

13.1

86.9

100.0%

150

CITY OF SHREVEPORT, LOUISIANASPECIAL ASSESSMENT BILLINGS AND COLLECTIONS

FISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31, 2004

FiscalYear

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Amount ofInstallment

AssessmentsDue

$26,034

20,009

2,800

2,667

2,533

2,133

2,267

6,238

7,732

12,502

TotalRevenueCollected

$58,564

33,034

19,758

7,170

12,167

14,111

32,562

9,236

3,573

4,193

Percentageof Revenue

To AssessmentsDue

225.0%

165.1

705.6

268.8

480.3

662.6

1,436.3

148.1

46.2

33.5

Unaudited - see accompanying independent auditor's report.

151

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152

CITY OF SHREVEPORT, LOUISIANARATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE

AND NET BONDED DEBT PER CAPITAFISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31, 2004

FiscalYear

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Population

195,815

201,270

201,568

201,325

201,500

200,145

201,059

201,100

202,096

202,851 (1)

AssessedValue

$763,224,730

792,161,740

832,135,880

854,888,230

855,952,380

898,928,580

937,275,970

946,647,780

964,939,480

1,105,690,930 (3)

GrossBondedDcbt(2)

$158,594,682

164,515,766

175,120,595

242,896,510

268,296,958

258,856,631

278,641,502

264,673,234

287,762,225

272,729,802

DebtServiceFund

$15,273,631

20,788,205

22,628,716

23,942,397

27,428,681

28,977,467

33,982,628

37,297,993

42,480,003

44,616,361

Ratio of NetNet Bonded Debt

Bonded to AssessedDebt Value

$143,321,051

143,727,561

152,491,879

218,954,113

240,868,277

229,879,164

244,658,874

227,375,241

245,282,222

228,113,441

18.8%

18.1

18.3

25.6

28.1

25.6

26.1

24.0

25.4

20.6

NetDebt PerCapita

$732

714

757

1,088

1,195

1,149

1,217

1,131

1,214

1,125

Note:(1) Source: Treasurer of the State of Louisiana(2) Includes all general obligation bonds payable from assessed property taxes in their original principal amount

outstanding. Included in this amount is $30,584 payable by the Water and Sewerage Fund.(3) Included in the total assessed value of property within the City is $8,808,680 of assessed value which has been

adjudicated to Caddo Parish.

Unaudited - see accompanying independent auditor's report.

153

CITY OF SHREVEPORT, LOUISIANARATIO OF ANNUAL DEBT SERVICE EXPENDITURES

FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURESFISCAL YEARS ENDED DECEMBER 31,1995 THROUGH DECEMBER 31, 2004

FiscalYear

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Principal

$9,783,852

9,673,370

11,407,584

14,175,866

12,101,307

22,581,167

26,360,111

26,100,991

28,233,630

28,278,794

Interest andOther Costs

$11,566,450

10,730,233

14,345,094

71,312,028

17,790,887

16,931,849

16,755,523

16,811,211

16,206,967

16,696,286

TotalDebt

Service

$21,350,302

20,403,603

25,752,678

85,487,894

29,892,194

39,513,016

43,115,634

42,912,202

44,440,597

44,975,080

TotalGeneral

GovernmentalExpenditures

$151,686,311

148,452,456

154,495,610

219,435,922

173,492,429

180,953,148

188,057,527

188,768,684

194,227,159

218,301,485

Debt Serviceasa

Percentageof General

Expenditures

14.1%

13.7

16.7

39.0

17.2

21.8

22.9

22.7

22.9

20.6

Unaudited - see accompanying independent auditor's report.

154

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157

CITY OF SHREVEPORT, LOUISIANADEMOGRAPHIC STATISTICS

FISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31, 2004

FiscalYear

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Population

195,815

201,270

201,568

201,325

201,500

200,145

201,059

201,100

202,096

202,851 (1)

MedianAge

33.3

33.3

34.3

34.3

34.5

34.5

35.4

35.0

34.7

34.3 (2)

SchoolEnrollment(3)

49,139

48,843

48,018

46,832

46,011

45,120

44,943

44,722

44,532

43,603

UnemploymentRate(4)

5.6%

6.3

5.8

4.7

3.6

4.9

7.1

6.6

6.1

5.7

Sources:

(1) Treasurer of the State of Louisiana(2) Center for Business Economic Research, Louisiana State University - Shreveport(3) Caddo Parish School Board(4) Louisiana Department of Labor

Unaudited - sec accompanying independent auditor's report.

158

CITY OF SHREVEPORT, LOUISIANAPROPERTY VALUE, CONSTRUCTION, AND BANK DEPOSITS

FISCAL YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31, 2004

Commercial Construction(l)FiscalYear

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Numberof Units

79

79

114

157

168

103

161

87

80

100

Value

$33,923,714

43,539,539

119,502,459

114,443,170

147,216,441

72,305,845

57,699,144

100,925,424

125,055,018

148,694,901

Residential Construction(l)Numberof Units

249

276

235

258

378

355

374

448

694

615

Value

$34,100,257

37,707,516

37,121,897

40,088,629

50,678,841

56,689,353

56,942,287

72,277,725

107,285,644

113,224,966

Commercial

Property

$3,530,817,633

3,624,132,887

3,848,666,193

3,980,958,240

3,967,175,833

4,124,484,713

4,431,493,320

4,605,346,320

4,613,848,820

4,998,795,613

Residential

Value(2)

$2,899,799,500

3,034,983,100

3,094,912,500

3,145,442,600

3,176,642,000

3,403,016,600

3,456,721,000

3,532,169,600

3,639,300,100

4,638,914,400

Bank deposits are not disclosed. Several banks in the City are part of statewide banking operations,and they are not able to isolate the deposits within the City of Shreveport.

Note: Property was revalued January 1, 2004.

Sources:(1) Permit and Inspection's Annual Reports(2) Estimated appraised value from the City of Shreveport Revenue Division's Tax Summary

Unaudited - see accompanying independent auditor's report.

159

CITY OF SHREVEPORT, LOUISIANAMISCELLANEOUS STATISTICS

DECEMBER 31,2004

Date of settlement

Date of incorporation

Form of government

Date established

Area-square miles

Lane miles of paved streets

Police protection:Number of policemen & officers

Fire protection:Number of firemen & officers

Employees:Classified, appointed, elected, and exempt

(exclusive of fire and police)

Recreation:Parks - Number of acresNumber of playgroundsNumber of picnic areasNumber of municipal golf courses

Number of street lights

Water storage tanks:Number of storage tanksTotal capacity of water storage tanks

Municipal water plant:Number of accountsDaily average consumptionMiles of water mains

Sewers:Number of accountsDaily average influent flowMiles of sewer mains

Miles of drainage ditches:PavedNon-paved

1835

1839

Mayor-Council

1978

121

1,564

Municipal568

Municipal557

2,228

1,78346423

30,013

1335,500,000 gallons

66,00040,000,000 gallons

1,072

63,00028,000,000 gallons

1,044

408930

Unaudited - see accompanying independent auditor's report.

160

CITY OF SHREVEPORT, LOUISIANA

OMB Circular A-133 Reports

December 31,2004

(With Independent Auditors' Reports Thereon)

CITY OF SHREVEPORT, LOUISIANA

Table of Contents

Page

Independent Auditors' Report on Internal Control Over Financial Reportingand on Compliance and Other Matters Based on an Audit of FinancialStatements Performed in Accordance With Government Auditing Standards 1

Independent Auditors' Report on Compliance With Requirements Applicable toEach Major Program and on Internal Control Over Compliance in AccordanceWith OMB Circular A-133 and Schedule of Expenditures of Federal Awards 3

Schedule of Expenditures of Federal Awards 5

Notes to Schedule of Expenditures of Federal Awards 8

Schedule of Findings and Questioned Costs 9

KPMGLLPSuite 1900333 Texas StreetShreveport, LA 71101-3692

Independent Auditors' Report on Internal Control Over Financial Reportingand on Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance With Government Auditing Standards

The Honorable Mayor and Members of the City CouncilCity of Shreveport, Louisiana:

We have audited the financial statements of the governmental activities, the business-type activities, theaggregate discretely presented component units, each major fund, and the aggregate remaining fundinformation of the City of Shreveport, Louisiana (City) as of and for the year ended December 31, 2004,which collectively comprise the City's basic financial statements, and have issued our report thereon datedApril 29, 2005. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the City's internal control over financial reporting inorder to determine our auditing procedures for the purpose of expressing our opinions on the financialstatements and not to provide opinions on the internal control over financial reporting. Our considerationof the internal control over financial reporting would not necessarily disclose all matters in the internalcontrol that might be material weaknesses. A material weakness is a reportable condition in which thedesign or operation of one or more of the internal control components does not reduce to a relatively lowlevel the risk that misstatements caused by error or fraud in amounts that would be material in relation tothe financial statements being audited may occur and not be detected within a timely period by employeesIn the normal course of performing their assigned functions. We noted no matters involving the internalcontrol over financial reporting and its operation that we consider to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations,contracts, and grant agreements, noncompliance with which could have a direct and material effect on thedetermination of financial statement amounts. However, providing an opinion on compliance with thoseprovisions was not an objective of our audit and, accordingly, we do not express such an opinion. Theresults of our tests disclosed no instances of noncompliance or other matters that are required to bereported under Government Auditing Standards.

We noted certain matters that we have reported to management of the City in a separate letter datedApril 29, 2005.

KPMQ LLP, 3 <J 5 limited liability partnership, is ihe J Smember firm al KPMG International, a Swiss coopersl.ve

This report is intended solely for the information and use of the Mayor and City Council members, auditsubcommittee, management, the State of Louisiana Legislative Auditor, federal awarding agencies, andpass-through entities, and is not intended to be and should not be used by anyone other than thesespecified parties.

LLT

April 29, 2005

KPMG LLPSuite 1900333 Texas StreetShreveport. LA 71101-3692

Independent Auditors1 Report on Compliance With Requirements Applicable toEach Major Program and on Internal Control Over Compliance in Accordance

With OMB Circular A-133 and Schedule of Expenditures of Federal Awards

The Honorable Mayor and Members of the City CouncilCity of Shreveport, Louisiana:

Compliance

We have audited the compliance of the City of Shreveport, Louisiana (City) with the types of compliancerequirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 ComplianceSupplement that are applicable to each of its major federal programs for the year endedDecember 31,2004. The City's major federal programs are identified in the summary of auditors* resultssection of the accompanying schedule of findings and questioned costs. Compliance with the requirementsof laws, regulations, contracts, and grants applicable to each of its major federal programs is theresponsibility of the City's management. Our responsibility is to express an opinion on the City'scompliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133require that we plan and perform the audit to obtain reasonable assurance about whether noncompliancewith the types of compliance requirements referred to above that could have a direct and material effect ona major federal program occurred. An audit includes examining, on a test basis, evidence about the City'scompliance with those requirements and performing such other procedures, as we considered necessary inthe circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit doesnot provide a legal determination on the City's compliance with those requirements.

As described in item 04-1 in the accompanying schedule of findings and questioned costs, the City did notcomply with requirements regarding the Davis-Bacon Act compliance requirement that is applicable to itsFederal Aviation Administration Program. Compliance with such requirements is necessary, in ouropinion, for the City to comply with the requirements applicable to that program.

In our opinion, except for the noncompliance described in the preceding paragraph, the City complied, inall material respects, with the requirements referred to above that are applicable to each of its majorfederal programs for the year ended December 31, 2004. However, the results of our auditing proceduresdisclosed instances of noncompliance with those requirements, which are required to be reported inaccordance with OMB Circular A-133 and which are described in the accompanying schedule of findingsand questioned costs as items 04-2,04-3,04-4, and 04-5.

. a U S lirrnleO liability partnership, is Ihe U.S.member firm of KPMG Irternalionat. a Swiss cooperative.

Internal Control Over Compliance

The management of the City is responsible for establishing and maintaining effective internal control overcompliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. Inplanning and performing our audit, we considered the City's internal control over compliance withrequirements that could have a direct and material effect on a major federal program in order to determineour auditing procedures for the purpose of expressing our opinion on compliance and to test and report oninternal control over compliance in accordance with OMB Circular A-133.

We noted certain matters involving internal control over compliance and its operation that we consider tobe reportable conditions. Reportable conditions involve matters coming to our attention relating tosignificant deficiencies in the design or operation of the internal control over compliance that, in ourjudgment, could adversely affect the City's ability to administer a major federal program in accordancewith the applicable requirements of laws, regulations, contracts, and grants. Reportable conditions aredescribed in the accompanying schedule of findings and questioned costs as items 04-1, 04-2, 04-3, 04-4,and 04-5.

A material weakness is a condition in which the design or operation of one or more internal controlcomponents does not reduce to a relatively low level the risk that noncompliance with the applicablerequirements of laws, regulations, contracts, and grants caused by error or fraud mat would be material inrelation to a major federal program being audited may occur and not be detected within a timely period byemployees in the normal course of performing their assigned functions. Our consideration of the internalcontrol over compliance would not necessarily disclose all matters in the internal control that might bereportable conditions and, accordingly, would not necessarily disclose all reportable conditions that arealso considered to be material weaknesses. However, of the reportable conditions described above, weconsider item 04-1 to be a material weakness.

Schedule of Expenditures of Federal Awards

We have audited the financial statements of the governmental activities, the business-type activities, theaggregate discretely presented component units, each major fund, and the aggregate remaining fundinformation of the City as of and for the year ended December 31, 2004, and have issued our reportthereon dated April 29, 2005. Our audit was performed for the purpose of forming opinions on thefinancial statements that collectively comprise the City's basic financial statements. The accompanyingschedule of expenditures of federal awards is presented for purposes of additional analysis as required byOMB Circular A-133 and is not a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated, in all material respects, in relation to the basic financial statements taken aswhole.

This report is intended solely for the information and use of the Mayor and City Council members, auditsubcommittee, management, the State of Louisiana Legislative Auditor, federal awarding agencies, andpass-through entities and is not intended to be and should not be used by anyone other than these specifiedparties.

LLT>

April 29, 2005

CITY OF SHREVEPORT, LOUISIANA

Schedule of Expenditures of Federal Awards

Year ended December 31,2004

Grant titleDepartment of Transportation:

Federal Transit Administration:Direct Programs:

Federal Transit Capital Investment Grants:Sportran 98 Capital ImprovementsSportran Maintenance FacilitySportran 00 Capital ImprovementsSportran 01 Capital ImprovementsSportran 02 Capital Improvements

Sportran 03 Capital ImprovementsSportran 04 Capital Improvements

Total Federal Transit Administration

Federal Aviation Administration:Direct Programs:

Airport Improvement Program:Land Acquisition Security Purposes - RegFAR Part 150 Property

Parallel Taxi way to Runway 14/32, RehabilitateRehabilitate Taxiway F - DowntownRehabilitation of Taxiway D - RegionalDrainage Improvements Safety AreaConstruct West Parallel Taxiway 4/22 RegionalSecurity Upgrade - Regional AirportTaxiway C and A North Lights - RegionalRedesign Taxiway D and Repair Apron - DowntownInstall Guidance System - Downtown AirportARFF Proximity Suits - Regional AirportAirport Layout Plans - Downtown Airport

Total Federal Aviation Administration

Federal Highway Administration:Direct Programs:

Federal Aid Program:Lakeshore Drive Extension Widening

National Highway Traffic Safety Administration:Passed through Louisiana Highway Safety Commission:

Shreveport Enforcement Project

Total U.S. Department of Transportation

U.S. Department of Housing and Urban Development:Direct Programs:

Community Development Block Grants/EntitlementGrants:

Community Development Block GrantSection 108 Loan Guarantees

FederalCFDAnumber

20.50020.50020.50020.50020.500

20.50020.500

20.10620.106

20.10620.10620.10620.10620.10620.10620.10620.10620.10620.10620.106

Grantnumber

LA-90-0194/LA-90-2I94LA-90-0207LA-90-0218&2218LA-90-0237&2237LA-90-0240&2240/LA-90-03-0096LA-90-0252 & 2252LA-90-0264 & 2264

3-22-0048-243-22-0048-19,21,22,24,25,26,28,29,33&363-22-0048-30/31/373-22-0047-XX3-22-0048-313-22-0048-313-22-0048-353-22-0048-3 13-22-0048-24&253-22-0047-123-22-0047-133-22-0048-313-22-0047-12

20.205

20.600

FAP No. M-8867 (002) /STP-0901 (507)

N/A

14.21814.248

MC-22-00073-99-MC-22-0007,3-99-MC-22-0007/A

Federalexpenditures

15,97013,13442,01916,679

16,825526,220

1.387,869

2,018,716

429,000

2,846,85562,56022,189

992171,856

6,385,19165,741

524,430410,50038,68930,79512.789

11,001,587

2,722,700

51,702

15,794,705

3,414,118

5,783,927

9,198,045

(Continued)

CITY OF SHREVEPORT, LOUISIANA

Schedule of Expenditures of Federal Awards

Year ended December 31,2004

Grant title

U.S. Department of Housing ind Urban Development(continued):

HOME Investment in Affordable HousingEmergency ShelterPassed through Louisiana Office of Community Service:

State Emergency Shelter

Total U.S. Department of Housing andUrban Development

U.S. Department of Labor:

Passed through Louisiana Department of SocialServices - Office of Family Support - LouisianaJ.E.T. Program

Passed through Louisiana Department of Labor:Workforce Investment Act - AdultWorkforce Investment Act - YouthWorkforce Investment Act - Dislocated Workers

Total U.S. Department of Labor

U.5. Department of Environmental Quality:Environmeatal Protection Agency:

Direct Programs:Brownfield Assessment GrantBrownfield Economic Development InitiativeEPA Clean Air

North Regional Sewer Service Area InfrastructureRehabilitation Program

Vulnerability Assessments and Security ImprovementsPassed through State of Louisiana Department

of Environmental Quality - Clean Water Program/Sewage System Program

Passed through State of Louisiana Departmentof Health and Hospitals - Safe Drinking WaterProgram

Total U.S. Department of Environmental Quality

U.S. Department of Justice:

Direct Programs:Edward Byrne Memorial State and Local Law

Enforcement Assistance DiscretionaryGrants Programs:

Weed and Seed TrainingWeed and Seed Training - QueensboroughWeed and Seed Special EmphasisWeed and Seed Public Housing

FederalCFDAnumber

14.23914.231

14.231

17.262

17.25817.25917.260

66.81166.81!66.811

66.60666.476

66.458

66.468

16.58016.58016.58016.580

Grantnumber

MC-22-0200MC-22-0003

06542

CFMS 590611

N/AN/AN/A

N/AN/AN/A

XP-986915-01-0HS 82998601

N/A

N/A

N/AN/AN/AN/A

Federalexpenditures

1,719,826138,654

130.214268,868

11,186,739

296,958

1,576,8491,057,1231.621.357

4,255.329

4,552.287

16,70620,94983.535

121,190

967,90021,090

28,351,384

4,618.724

34,080,288

124,878104,748103,156

3.097

335,879

(Continued)

CITY OF SHREVEPORT, LOUISIANA

Schedule of Expenditures of Federal Awards

Year ended December 31, 2004

Grant title

U.S. Department of Justice (continued):Bymc Formula Grants:

Reduction of Crack/Drug HousesProperty CrimeIntegrated Criminal ApprehensionAntitcrrorism

Direct Programs'.Public Safety Partnership and Community Policing

Grants:Police Block Grant VIIPolice Block Grant VIII

Asset ForfeitureAsset Forfeiture - QuecnsboroughDrug Abuse Resistance EducationA.F.I. S. 2003A.F.I.S. 2004Knock and Talk GrantSafe and Sober GrantOrganized Crime Drug EnforcementHigh Intensity Drug TrafficingUniform Crime Reporting GrantWeapons of Mass Destruction

Total U.S. Department of Justice

U.S. Department of Homeland Security:Direct Programs:

First Responder Grant

Total Department of Homeland Security

U.S. Department of Interior:Direct Programs:

McNeil St Pumping Station

Total Department of Interior

U.S. Department of Commerce:Direct Programs:

Shrevepark Interior Roads

Total U.S. Department of Commerce

U.S. Department of Health and Human Services:Passed through Louisiana Department of Labor:

STEPS

Total U.S. Department of Health andHuman Services

Total Federal Financial Assistance

FederalCFDA

number

16.57916.57916.57916.579

97.038

15.929

11.300

93.558

Grantnumber

Federalexpenditures

97-BI-B.07-0025B03-1-OI3B03-I-012B03-1-014

16.59216.592

16.99999999916.99999999916.99999999916.99999999916.99999999916.99999999916.99999999916.99999999916.99999999916.999999999

16.999999999

2002-LB-BX-06942003-LB-BX-1153

N/AN/AE04-1-012N/AN/AN/AN/AN/AN/AN/AN/A

N/A

22-01-ML-I156

08-01-03213

CFMS 610355

4,75327,93131,7107,537

71,931

258,450165.426

423,876

47,38286,35761,004

173,370183,300

304,100

30,88132,147

102,39851,480

1,604,135

16,150

16,150

86,269

86,269

839,355

839,355

51,930

51,930

68,211,858

See accompanying notes to schedule of expenditures of federal awards.

7

CITY OF SHREVEPORT, LOUISIANA

Notes to Schedule of Expenditures of Federal Awards

December 31,2004

(1) General

The accompanying schedule of expenditures of federal awards includes the federal grant activity of theCity of Shreveport, Louisiana (the City) and is presented using the modified accrual basis of accounting.The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amountspresented in this schedule may differ from amounts presented in, or used in, the preparation of the basicfinancial statements.

(2) Subrecipients

Of the federal expenditures presented in the schedule, the City provided federal awards to subrecipients asfollows:

Program title

Community Development Block GrantHOME Investment in Affordable HousingWorkforce Investment Act

FederalCFDA

number

14.21814.239

17.258,17.259,17.260

Amountprovided to

subrecipients

445,610808,584

1,705,104

CITY OF SHREVEPORT, LOUISIANA

Schedule of Findings and Questioned Costs

Year ended December 31,2004

Section 1 — Summary of Auditor's Results

Financial Statements

Type of report issued on the basic financial statements: unqualified opinion

Internal control over financial reporting:

• Material weaknesses identified? No

• Reportable conditions in internal control were disclosed by the audit of the basic financial statements?None reported

Noncompliance which is material tcPthe basic financial statements? No

Federal Awards

Internal control over major programs:

• Material weaknesses identified? Yes

• Reportable conditions in internal control over major programs? Yes

Type of auditor's report issued on compliance for major programs: qualified opinion

Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB CircularA-133? Yes

Identification of major programs:

CFDA number Name of federal program or cluster

20.106 Department of Transportation - Federal Aviation Administration - AirportImprovement Program

20.205 Department of Transportation - Federal Highway Administration -Federal Aid Program - Lakeshorc Drive Extension Widening

20.500 Federal Transit Administration - Department of Transportation - FederalTransit Capital Investment Grants

66.458 Environmental Protection Agency - Office of Water - Clean Water Act

66.468 Environmental Protection Agency - Office of Water, Office of GroundWater and Drinking Water - Safe Drinking Water Act

66.606 Environmental Protection Agency - North Regional Sewer Service AreaInfrastructure Rehabilitation Program

Dollar threshold used to distinguish between Type A and Type B programs: $883,735

Auditee qualified as a low-risk auditee under section 530 of OMB Circular A-133: No

9 (Continued)

CITY OF SHREVEPORT, LOUISIANA

Schedule of Findings and Questioned Costs

Year ended December 31,2004

Section 2 - Financial Statement Findings Reported in Accordance with Government Auditing Standards

None

Section 3 - Federal Award Findings and Questioned Costs

Item: 04-1

Grant: Federal Aviation Administration - Airport Improvement Program

CFPA Number; 20.106

Grant Numbers: 3-22-0048-031 and 3-22-0048-035

Criteria or specific requirement: Davis-Bacon Act

Type of Finding: Material noncompliance and material weakness

Condition: Non-federal entities shall include in their construction contracts subject to the Davis-Bacon Act arequirement that the contractor or subcontractor comply with the requirement of the Davis-Bacon Act and theDOL regulations (29 CFR part 5, "Labor Standards Provisions Applicable to Contracts Governing FederallyFinanced and Assisted Construction"). This includes a requirement for the contractor or subcontractor to submitto the non-Federal entity a weekly, for each week in which any contract work is performed, a copy of the payrolland a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6). During our audit, we notedtwo contractors (Wilhite Electric and Russell Electric) did not submit a signed statement of compliance asrequired by the Davis-Bacon Act.

Questioned Costs: $529,927

Context: The City had six projects under the grant with payroll costs during the year. Some projects onlyincurred costs during a portion of the year. A total of seven contractors were used for all of the projects. Onlytwo of the seven contractors used subcontractors. We selected 15 weeks of payroll during the year and reviewedone contractor for each week. We reviewed payroll for six different contractors. After expansion of ourtestwork we noted that the two contractors with exceptions continued to have exceptions.

Effect: The City is not in compliance with the Davis-Bacon Act. This results in a lack of certification from thecontractor to ensure reimbursement requested from the Federal Aviation Administration is in compliance withthe required prevailing wage rate.

Cause: While we noted that a control was in place for airport management and the master services engineer toreview the submitted payroll, it was not operating effectively. Submitted documentation was being initialed asreviewed but errors were not identified. Appropriate procedures are not in place to ensure that the contractorssubmit a signed statement of compliance,

Recommendation! We recommend the City implement procedures to document that a certified payroll andstatement of compliance is received from the contractor and reviewed by the City.

10 (Continued)

CITY OF SHREVEPORT, LOUISIANA

Schedule of Findings and Questioned Costs

Year ended December 31,2004

Management's Response:

A) Name of Contact Responsible- Manager of Administrative Services

B) Corrective Action Planned - As noted by the finding, procedures are already in place for Airportmanagement and the Master Service Engineer to review the submitted payroll. However, theseprocedures will be revised to ensure a more efficient process. The Payment Processing Checklist will berevised to state "Certified11 payroll attached and the Manager of Administrative Services and theManagement Assistant will ensure compliance. The engineer will identify any errors in the wage rates.The Accounting Specialist will continue to audit the certified payroll and identify any arithmetic errors.

C) Anticipated Completion Date - Immediately

Item: 04-2

Grant: Federal Aviation Administration - Airport Improvement Program

CFDA Number: 20.106

Grant Number: 3-22-0048-035,3-22-0047-012, 3-22-0048-33

Criteria or specific requirement: Cash Management

Type of Finding: Noncompliance and reportable condition

Condition: When entities are funded on a reimbursement basis, program costs must be paid for with entityfunds before reimbursement may be requested from the Federal Government. During our audit, we noted fourinstances (check numbers 340456, 343095, 336218 and 345525) where program costs were requested forreimbursement prior to being paid by the City.

Questioned Costs: None.

Context: Out of a total sample of 44 checks, four instances were found whereby the check date was subsequentto request for reimbursement.

Effect: The City is not in compliance with cash management requirements.

Cause: Appropriate procedures are not in place to ensure that reimbursements are requested only after paymenthas been made by the City.

Recommendation: We recommend that the City implement procedures to verify and document that paymenthas been made before reimbursement is requested. The City should also implement procedures to reconcilereimbursement requests to the general ledger.

Management's Response:

A) Name of Contact Responsible - Management of Administrative Services

11 (Continued)

CITY OF SHREVEPORT, LOUISIANA

Schedule of Findings and Questioned Costs

Year ended December 31,2004

B) Corrective Action Planned - We agree that there may be some instances in which the reimbursementrequest was made prior to the invoice being paid by the City. Our current procedure is to submit theinvoice to the Finance Department for payment, then we prepare the reimbursement request. TheManagement Assistant will now review the FAMIS system to ensure that a check has printed before thereimbursement request is processed.

C) Anticipated Completion Date - Immediately

Item: 04-3

Grant: Federal Aviation Administration - Airport Improvement Program

CFDA Number: 20.106

Grant Number: 3-22-0048-031

Criteria or specific requirement: Equipment and Real Property Management

Type of Finding: Noncompliance and reportable condition

Condition: The percentage of federal participation and the condition of the equipment were not included in theproperty records for the runway sweeper per prior year item 03-2. Corrective action planned has not beencompleted.

Questioned Costs: None.

Context: See condition above.

Effect: This results in a lack of information to ensure reimbursement to the FAA for the federal share of salesproceeds when subject equipment is sold and to ensure proper valuation of equipment for reporting,depreciation, replacement, and disposal.

Cause: Appropriate procedures are not in place to ensure that the federal participation and equipment conditionare documented in the property records.

Recommendation: Create appropriate fields in the fixed asset system to record federal participation and theequipment's condition at the time of acquisition. Implement procedures to record information and computereimbursement as equipment and real estate are sold.

Management's Response:

A) Name of Contact Responsible- Fixed Asset Accountant

B) Corrective Action Planned - During 2004, attempts were made to use fields in the Fixed AssetSystem to identify federal participation, but the system did not recognize these fields. It was determinedthat programming changes would be required. Changes and testing will be done in 2005.

C) Anticipated Completion Date - October 2005

12 (Continued)

CITY OF SHREVEPORT, LOUISIANA

Schedule of Findings and Questioned Costs

Year ended December 31, 2004

Item: 04-4

Grant: Environmental Protection Agency - North Regional Sewer Service Area Infrastructure RehabilitationProgram

CFPA Number: 66.606

Grant Number: XP-986915-01-0

Criteria or specific requirement: Reporting

Type of Finding: Noncompliance and reportable condition

Condition: The City's agreement with the Environmental Protection Agency states: "The recipient agrees tocomply with the requirements of EPA's Program for Utilization of Small, Minority and Women's BusinessEnterprises in procurement under assistance agreements. The recipient agrees to submit an EPA form 5700-52A"MBE-WBE Utilization Under Federal Grants, Cooperative Agreements and Interagency Agreement" beginningwith the federal fiscal year quarter the recipient receives the award, and continuing until the project iscomplete." During our audit, we noted the form 5700-52A "MBE-WBE" Utilization Under Federal Grants,Cooperative Agreements and Interagency Agreement did not include required data regarding the "MBE-WBE"utilization by the City. Reports over the time period that construction work was performed should havecontained costs, but all the reports in 2004 were filed without any relevant construction labor cost reported. TheCity did not request supporting information from the contractor related to "MBE-WBE" utilization in order tocomplete the form correctly.

Questioned Costs: None.

Context; We tested 100% of the population of reports.

Effect: The City is not in compliance with reporting requirements.

Cause: Appropriate procedures are not in place to properly review and document that MBE-WBE utilizationreports are submitted by contractors and properly reported to the federal agency.

Recommendation: We recommend the City implement procedures to document that MBE-WBE utilizationreports are submitted by contractors and reviewed by the City and information is properly reported to the FederalAgency.

Management's Response:

A) Name of Contact Responsible- Grant Writer and Project Manager

B) Corrective Action Planned - The EPA DBE Coordinator requested that the City report the totalcontract amount for MBE/WBE utilization on Form 5700-52A when executed rather than showing costsas expenditures occur. The City is inclined to comply with the federal agency's request since it has theauthority to withhold funding.

C) Anticipated Completion Date - August 31,2005

13 (Continued)

CITY OF SHREVEPORT, LOUISIANA

Schedule of Findings and Questioned Costs

Year ended December 31,2004

Item: 04-5

Grant: Environmental Protection Agency - North Regional Sewer Service Area Infrastructure RehabilitationProgram

CFDA Number: 66.606

Grant Number: XP-986915-01-0

Criteria or specific requirement: Matching

Type of Finding: Noncompliance and reportable condition

Condition; The City is required to provide contributions of 45% of approved costs, and the agency provides theremaining 55%. The City requested 57.10% of the existing contract cost. The reimbursement request was not incompliance with matching requirements of the grant based on the existing contract with the contractor.

Questioned Costs: $35,571

Context: See condition above.

Effect: The City is not in compliance with the matching requirements of the grant and may be required to refundgrant revenue to the federal agency at the end of the project.

Cause; Reimbursement was requested based on total amount allowed without consideration of matchingrequirements. Appropriate procedures are not in place to review and document that reimbursement requestsconsider the matching requirements of the grant.

Recommendation; We recommend the City implement procedures to review and document that the matchingrequirement is considered at the time of the reimbursement.

Management's Response:

A) Name of Contact Responsible- Grant Writer and Project Manager

B) Corrective Action Planned - The City requested reimbursement aware of an impending change orderwhich would increase the contract amount. That change order became effective on February 1, 2005,making the City's effective request 55% of the amended contract. The City is confident that it willcontribute more than its 45% costs share and will not be required to refund grant revenue to the federalagency at the end of the project.

C) Anticipated Completion Date - August 31, 2005

14

City ofShreveportSummary Schedule of Prior Audit Findings

December 31,2004

Finding: 03-1

R.S. 24:514 requires municipal retirement system funded in whole or in part out of publicfunds shall furnish to the legislative auditor, annually, actuarial valuations. Suchvaluations shall be submitted to the legislative auditor between the first and one hundredtwentieth day following the close of the fiscal year of the retirement system.

The City of Shreveport has three retirement systems funded in whole or part out of publicfunds. The City of Shreveport did not file the related actuarial valuations with thelegislative auditor's office prior to the one hundred twentieth day following the close ofthe fiscal year of the retirement system.

Status: Corrective action was taken

Finding: 03-2

Grant: Federal Aviation and Administration

Equipment and Real Property Management. The percentage of federal participation andthe condition of the equipment were not included in the property records for the runwaysweeper.

Status: Partially Complete. The fixed asset system has been moved into test, andthe fields have been changed to note federal participation. Testing has not beencompleted but should be finished and completed by 2004 year end.

Finding: 03-3

Grant: Federal Aviation and Administration

Real Property Acquisition and Relocation. The City does not have procedures in place tomonitor the acquisition and relocation assistance performed by its contracted consultant,W.D. Shock, for compliance with federal requirements.

Status: Corrective action was taken

KPMGLLPSuite 1900333 Texas StreetShreveport, LA 71101-3692

April 29,2005

CONFIDENTIAL

Mr. Theron Jackson, ChairmanAudit Subcommittee and Members of the City Council

City of Shreveport, Louisiana

Ladies and Gentlemen:

We have audited the financial statements of the City of Shreveport, Louisiana (the City) for the year endedDecember 31, 2004, and have issued our report thereon dated April 29, 2005. In planning and performingour audit of the financial statements of the City, we considered internal control in order to determine ourauditing procedures for the purpose of expressing our opinion on the financial statements. An audit doesnot include examining the effectiveness of internal control and does not provide assurance on internalcontrol. We have not considered internal control since the date of our report.

During our audit, we noted certain matters involving internal control and other operational matters that arepresented for your consideration. These comments and recommendations, all of which have beendiscussed with the appropriate members of management, are intended to improve internal control or resultin other operating efficiencies and are summarized as follows:

BID LAW

The City entered into a contract with Bioset of Shreveport LLC, to process sludge from the Lucas WaterTreatment Plant and grow sod, which is sold back to the City. The City donated approximately 450 acresto Bioset on which Bioset would be responsible for building the facility and maintaining a sod farm. TheCity agreed to provide Bioset with at least 15 dry tons of sludge per day and pay Bioset a minimum of$112,500 per month for 25 years for processing the sludge.

While the City followed internal procedures for a service contract and did not place this transaction out forbid, a complaint alleges the City circumvented the bid law by portraying the contract as a service ratherthan as a public works project given that it involves construction of a facility on public land among anumber of other issues. Recently, Bioset has abandoned the facility and the City is exploring its legaloptions in connection therewith. Based on the complaint and the number of issues involved, the Cityshould consider the need to obtain an attorney general's opinion in this matter. While ultimately the Citymay have complied with the bid law consideration should be given to the benefits of placing transactionsout for bid which allows for competition among bidders, helps to eliminate the possibility of fraud andfavoritism and avoids undue or excessive costs.

Management's response - The contract with Bioset was a professional services contract. Bioset washired to process sewerage sludge from the City's Lucas Wastewater Treatment Plant into "Class A"material; suitable for most any use without restriction. Under the contract, Bioset was also required to

KPMG LIR a U S limned liability pen ner shin, is the U S.member firm o( K=MG International, a Swiss cooperative.

Mr. Theron Jackson, ChairmanAudit Subcommittee and Members of the City Council

April 29,2005Page 2

develop a sod farm using the bulk of the processed material as a soil conditioner, and the City wouldreceive a portion of the sod for its needs. Other service proposals were considered and rejected prior toBioset's selection, including a proposal for the processing of sludge into a fuel product in conjunction witha proposed power plant at the Port, and the trucking of raw sludge to a composting facility.

Payment to Bioset for services performed was made by volume-based "tipping fees". The City grantedBioset a right of use (not a donation, as stated in the comment) of its sludge farm so that it could constructfacilities to perform these services. These facilities are owned, maintained, and operated by Bioset withoutdirection or control by the City.

Bioset has defaulted on its obligation under the contract (primarily, the obligation to develop a turf farmand provide the City with turf) and has recently filed for bankruptcy. Because of the imminent need ofuninterrupted operation of the facility, the City is currently operating the facility as "keeper." The City isnow considering all options available to it for the long term handling of its sludge; including identifyingnew service providers to operate the plant, acquisition, and operation of the plant itself, and other possiblealternatives.

COSWEB RECONCILIATION

The reconciliation of COSWEB to the general ledger has not been performed in a timely manner. InDecember 2004 we requested the September 2004 reconciliation which had not been prepared. As ofMarch 2005 the delinquent reconciliations were completed and were being prepared on a timely basis. Inaddition, we noted that review of the reconciliation was not documented.

We recommend that the City implement procedures to ensure all reconciliations of accounts are completedtimely, reviewed by someone other than the preparer and the review be documented.

Management's Response - We agree that reconciliations were not performed in a timely manner. Wewill monitor these to ensure timely reporting and the Water and Sewerage fund accountant will documentthat a review has been performed.

RECONCILIATION OF FEDERAL PROGRAMS

Consistent with our comment in the prior year, we noted instances in which reconciliations of the supportfor grant programs to the general ledger were not performed. Specifically we identified the following:

• A receivable was not recorded for the Department of Commerce EDA grant. Costs were incurred in2003 but reimbursement was not requested until August 2004. Thus, the reimbursement request wasnot timely and accounting was not aware of the grant or the receivable until the revenue was received.

Mr. Theron Jackson, ChairmanAudit Subcommittee and Members of the City Council

April 29,2005Page 3

• Reimbursement requests are not made timely for the Airport Improvement Program. Specifically, asof December 16, 2004 we noted the following invoices that had been paid for which reimbursementhad not been requested:

Payment Date

• Alliance, Inc. $12,945 June 25,2004

• Best Yet Builders, LLC $372,941 September 22,2004

• W.D. Shock $14,747 October 29,2004

We, again recommend that a reconciliation process be implemented between the reimbursement requestsand the expenditures per the general ledger documenting any differences. Each grant administrator shouldbe responsible for periodically performing this review to ensure that the amounts reported on thereimbursement requests reflect the amounts in that particular grant's expenditure index codes. Based onthese facts and the repeat comments, consideration should be given to centralizing grant accounting in theAccounting Division.

Management's Response (Department of Commerce EDA grant) - This project (442988), ShreveIndustrial Park Roadway, was established in 1996 and has had multiple funding sources over the years.Grant sources were budgeted prior to actual approvals. Accounting previously tried to accrue revenueagainst a state grant that was not approved at that point, and the auditors disallowed this accrual in 2003.We were not aware that the EDA grant was approved. This project is handled by a City engineer, and wehave requested that he notify Accounting as to future drawdowns. Funds were not received untilSeptember 2004, which would not have been a timely accrual for 2003. We will continue to monitor thisproject in coordination with the City engineer in charge of the project.

Management's Response (Airport Improvement Program) - We disagree with the general statement thatreimbursements are not being made timely for the Airport Improvement Program. However, we do agreethat the reimbursement requests for the invoices in question were not made timely. A monthlyreconciliation is being prepared by the Manager of Administrative Services and forwarded to theapplicable personnel to ensure more timely reimbursement requests.

UNCLAIMED PROPERTY

The City has unclaimed property in the form of outstanding checks totaling $390,988 that has not beenremitted to the State of Louisiana. We recommend the City review this unclaimed property, remit theappropriate amounts to the state, and implement procedures to locate the owners and more timely remitunclaimed items to the state.

Management's Response - We were unaware of this requirement. However, we have determined thiscomment is correct and the City will follow this recommendation.

Mr. Theron Jackson, ChairmanAudit Subcommittee and Members of the City Council

April 29, 2005Page 4

PROCUREMENT CARD

We noted three procurement cardholders had not submitted supporting reimbursement documentation asof December 2004 for three reimbursement requests. One was from June 2004 and the remaining two werefrom October 2004. The documentation for the two in October were subsequently received but nodocumentation was received for the June 2004 statement. We recommend the City implement proceduresto ensure all proper documentation is timely received to support the expenditures purchased with theprocurement card.

Management's Response - We agree that supporting documentation was not received timely. Accountingwill send monthly correspondence to departments detailing outstanding supporting documentation.

SPORTRAN

During 2004, the City capitalized the costs for the Metro Planning Study, a study, for which the purpose isto determine if additional and/or extended SporTran services would be beneficial to the City. Alsoincluded in these capitalized costs were labor costs. These expenses did not appear to be valid capitalexpenditures and, therefore, were expensed through an adjustment. We recommend the City implementprocedures with respect to SporTran to ensure assets qualify for capitalization and have initial useful livesextending beyond a single reporting period.

Management's Response - We agree that these costs should be expensed and appropriate entries weremade in the year reported. Future projects will be evaluated to determine if they meet capitalizationrequirements.

CONSTRUCTION IN PROGRESS

During 2004, there were several construction in progress (CIP) accounts that had little or no activity.Some of these were on going projects awaiting funding or development, however, others were completedprojects that should have been closed and reclassifled as capital assets. By not closing these projectstimely, the City has understated depreciation on these projects. We recommend the City implementprocedures to review CIP at least quarterly to determine if projects should be closed and reclassified ascapital assets.

Management's Response - We agree and will implement appropriate review procedures on a periodicbasis.

PAYROLL

Certain payroll files have not been purged since 1997. The files include active employees as well asemployees that have "separated" from the City. The separated employees will continue to be corrected inthe files until the system is purged. We recommend the City purge the system periodically to eliminateseparated employees as this could provide a potential avenue for paying a fictitious employee.

Mr. Theron Jackson, ChairmanAudit Subcommittee and Members of the City Council

April 29,2005PageS

Management's Response - We agree and will purge files through December 31, 2000 on July 1, 2005.Files will be purged periodically in the future.

* * * * * * *

Our audit procedures are designed primarily to enable us to form an opinion on the financial statements,and therefore may not bring to light all weaknesses in policies or procedures that may exist. We aim,however, to use our knowledge of the company's organization gained during our work to make commentsand suggestions that we hope will be useful to you.

We would be pleased to discuss these comments and recommendations with you at any time.

This report is intended solely for the information and use of the Mayor and City Council members, auditsubcommittee, management, the State of Louisiana Legislative Auditor, federal awarding agencies, andpass-through entities and is not intended to be and should not be used by anyone other than these specifiedparties.

Very truly yours,

LCP

SHREVEPORT REGIONAL AIRPORT

Passenger Facility Charge Program

Year ended December 31,2004

(With Independent Auditors* Reports Thereon)

SHREVEPORT REGIONAL AIRPORT

Table of Contents

Page

Independent Auditors* Report on Internal Control Over Financial Reporting andon Compliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance With Government Auditing Standards 1

Independent Auditors' Report on Compliance With Requirements Applicable tothe Passenger Facility Charge Program and on Internal Control Over Complianceand Schedule of Passenger Facility Charges Revenues and Disbursements 3

Schedule of Passenger Facility Charges Revenues and Disbursements andAccompanying Notes 5

Schedule of Passenger Facility Charge Program Findings and Questioned Costs 7

KPMGLLPSuite 1900333 Texas StreetShreveport, LA 71101-3692

Independent Auditors' Report on Internal Control Over Financial Reportingand on Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance With Government Auditing Standards

The Honorable Mayor and Members of the City CouncilCity of Shreveport, Louisiana:

We have audited the financial statements of the governmental activities, the business-type activities, theaggregate discretely presented component units, each major fund, and the aggregate remaining fondinformation of the City of Shreveport, Louisiana (City) as of and for the year ended December 31, 2004,which collectively comprise the City's basic financial statements and have issued our report thereon datedApril 29, 2005. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the City's internal control over financial reporting inorder to determine our auditing procedures for the purpose of expressing our opinions on the financialstatements and not to provide assurance on the internal control over financial reporting. Our considerationof the internal control over financial reporting would not necessarily disclose all matters in the internalcontrol that might be material weaknesses. A material weakness is a re port able condition in which thedesign or operation of one or more of the internal control components does not reduce to a relatively lowlevel the risk that misstatements caused by error or fraud in amounts that would be material in relation tothe financial statements being audited may occur and not be detected within a timely period by employeesin the normal course of performing their assigned functions. We noted no matters involving the internalcontrol over financial reporting and its operation that we consider to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations,contracts, and grant agreements, noncompliance with which could have a direct and material effect on thedetermination of financial statement amounts. However, providing an opinion on compliance with thoseprovisions was not an objective of our audit and, accordingly, we do not express such an opinion. Theresults of our tests disclosed no instances of noncompliance or other matters that are required to bereported under Government Auditing Standards.

We noted certain matters that we have reported to management of the City in a separate letter datedApril 29, 2005.

KPMG LLP, a U S. limited liability panneishp. is the U S.memoer iirfr of UPMG International, a Swiss cooperative

This report is intended solely for the information and use of the Mayor and City Council members, auditsubcommittee, management, the State of Louisiana Legislative Auditor, federal awarding agencies, andpass-through entities and is not intended to be and should not be used by anyone other than these specifiedparties.

April 29, 2005

Our consideration of the internal control over compliance would not necessarily disclose all matters in theinternal control that might be material weaknesses. A material weakness is a importable condition in whichthe design or operation of one or more of the internal control components does not reduce to a relativelylow level the risk that noncompliance with applicable requirements of laws, regulations, and contractscaused by error or fraud that would be material in relation to the passenger facility charge program beingaudited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over complianceand its operations that we consider to be material weaknesses.

Schedule of Passenger Facility Charges Revenues and Disbursements

We have audited the financial statements of the governmental activities, the business-type activities, theaggregate discretely presented component units, each major fund, and the aggregate remaining fundinformation of the City as of and for the year ended December 3 1 , 2004, and have issued our reportthereon dated April 29, 2005. Our audit was performed for the purpose of forming opinions on thefinancial statements that collectively comprise the City's basic financial statements. The accompanyingschedule of passenger facility charges revenues and disbursements is presented for purposes of additionalanalysis as specified in the Guide and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financialstatements taken as a whole.

This report is intended solely for the information and use of the Mayor and City Council members, auditsubcommittee, management, the State of Louisiana Legislative Auditor, and the Federal AviationAdministration and is not intended to be and should not be used by anyone other than these specifiedparties.

April 29, 2005

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SHREVEPORT REGIONAL AIRPORT

Notes to Schedule of Passenger Facility Charges Revenues and Disbursements

December 31,2004

(1) General

The accompanying schedule of passenger facility charges revenues and disbursements is presented usingthe modified accrual basis of accounting. The information in this schedule is presented in accordance withthe requirements described in the Passenger Facility Charge Audit Guide for Public Agencies. Therefore,some amounts presented in this schedule may differ from amounts presented in, or used in the preparationof the financial statements.

(2) Passenger Facility Charges Matching Funds

Effective November 1, 2002, the Federal Aviation Administration approved an amendment to theAirport's passenger facility charge (PFC) application raising its PFC from $3.00 (the rate sinceFebruary 1,1994) to $4.50 per passenger enplanement A PFC application was approved onFebruary 6,1996 to approve the use of PFC revenue for debt service and financing costs of PFC approvedprojects. Also, the total approved net PFC revenue to be collected was reduced. In accordance with theRecords of Decision between the Airport and the Federal Aviation Administration, the Airport has usedPFC revenues to fund debt service and financing costs of the Airport's terminal renovation project. Therenovated terminal is leased to air carriers based on the amount of occupied square footage and aprescribed rate schedule.

SHREVEPORT REGIONAL AIRPORT

Schedule of Passenger Facility Charge Program Findings and Questioned Costs

Year ended December 31, 2004

Section 1 - Summary of Auditor's Results

Financial Statements

Type of report issued on the basic financial statements: unqualified opinion

Internal control over financial reporting:

• Material weaknesses identified? No

• Reportable conditions in internal control were disclosed by the audit of the financial statements?None reported

Noncompliance which is material to the basic financial statements? No

Passenger Facility Charges

Type of report issued on the passenger facility charge program: unqualified opinion

Internal control over the passenger facility charge program:

• Material weaknesses identified? No

• Reportable conditions in internal control over major programs? None reported

Type of auditor's report issued on compliance for the passenger facility charge program: qualified opinion

Any audit findings disclosed that are required to be reported in accordance with the Passenger Facility ChargeAudit Guide for Public Agencies, issued by the Federal Aviation Administration? Yes

Quarterly revenue and disbursements reconcile with submitted quarterly reports? Yes

Passenger facility charge program revenue and interest in the general ledger agreed to amounts reported on FAAForm 5100-127? Yes

The Public Agency maintains a separate financial accounting record for each application? Yes

Funds disbursed were for passenger facility charge program eligible items as identified in the FAA decision topay only for the allowable costs of the projects? Yes

Monthly carrier receipts reconciled with quarterly carrier reports? Yes

Passenger facility charge program revenues were maintained in a separate interest-bearing capital account orcommingled only with other interest-bearing airport capital funds? Yes

Serving carriers notified of passenger facility charge program actions/changes approved by the FAA? Yes

Quarterly reports transmitted (or available via Web site) to remitting carriers? Yes

The Public Agency is in compliance with Assurances 5,6, 7, and 8? No

7 (Continued)

SHREVEPORT REGIONAL AIRPORT

Schedule of Passenger Facility Charge Program Findings and Questioned Costs

Year ended December 31,2004

Project administration is carried out in accordance with Assurance 10? Yes

For those public agencies with excess revenue, a plan for the use of this revenue has been submitted to the FAAfor review and concurrence? N/A

Section 2 - Financial Statement Findings Reported in Accordance With Government Auditing Standards

None

Section 3 -Passenger Facility Charges Findings and Questioned Costs

Item: 04-1

Criteria or specific requirement: The provisions of 14 CFR Part 158, Appendix A, Assurance 8, prohibits theairport from including in its rate base by means of depreciation, amortization or other means, that portion of thecapital costs of a project paid for by PFC revenue.

Condition: We obtained the 2004 calculation of rental rates for terminal rentals. Included in the costs used todetermine the rates is the debt service for the 1997 PFC bonds. These bonds are paid with PFC revenue.

Questioned cost: None

Context: See condition above.

Effect: The Authority was not in compliance with 14 CFR Part 158, Appendix A, Assurance 8.

Cause: Unknown.

Recommendation: The Authority should not include any capital costs of a project paid for by PFC revenue, inits determination of terminal rental rates.

Management's response:

A) Name of contact responsible - Manager of Administrative ServicesB) Corrective action planned - We do not agree that the Authority was not in compliance with 14 CFR

Part 158 Appendix A, Assurance 8. The Airport did not include bymeans of depreciation, amortization or other means any portion of thecapital costs of a project paid for by PFC revenue. While it is true thatwe did include the debt service for the 1997 PFC bonds in 2004calculation of the rental rates for the terminal rentals, we also includedthe PFC revenue in the rate calculation. Therefore, only the "netamount" or the amount that the debt service exceeded the revenueimpacted the rental rates for 2004. This amount was funded by ouroperating account and can be included in the rate calculation.

C) Anticipated completion date - N/A

8